As filed with the Securities and Exchange Commission on April 18, 2011

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

ZILLOW, INC.

(Exact name of registrant as specified in its charter)

Washington

7389

20-2000033

(State or other jurisdiction of

(Primary Standard Industrial

(I.R.S. Employer

incorporation or organization)

Classification Code Number)

Identification Number)

999 Third Avenue, Suite 4600

Seattle, Washington 98104

(206) 470-7000

www.zillow.com

(Address, including zip code, and telephone number, including area code, of registrants principal executive offices)

Spencer M. Rascoff

Chief Executive Officer

Zillow, Inc.

999 Third Avenue, Suite 4600

Seattle, Washington 98104

(206) 470-7000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

David F. McShea

Andrew B. Moore

Bradley D. Owens

Perkins Coie LLP

1201 Third Avenue, Suite 4800

Seattle, Washington
98101-3099

(206) 359-8000

Kathleen Philips

General Counsel

Zillow, Inc.

999 Third Avenue, Suite 4600

Seattle, Washington 98104

(206) 470-7000

Horace L. Nash

Alan C. Smith

James D. Evans

Fenwick & West LLP

1191 Second Avenue, 10th Floor

Seattle, Washington 98101

(206) 389-4510

Approximate date of commencement of proposed sale to the public: As soon as practicable after this
Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same offering ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box
and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

x (Do not check if a smaller reporting company)

Smaller reporting company

¨

CALCULATION OF REGISTRATION FEE

Title of Each Class of

Securities to Be Registered

Proposed MaximumAggregate OfferingPrice(1)(2)(3)

Amount ofRegistration Fee

Class A common stock, $0.0001 par value per share

$51,750,000

$6,009

(1)

Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

(2)

Includes offering price of shares that the underwriters have the option to purchase to cover over-allotments, if any.

(3)

Excludes $5.5 million of Class A common stock to be sold in a concurrent private placement to existing investors, including funds affiliated with Technology
Crossover Ventures.

The
registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said
Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We may not sell
these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED APRIL 18, 2011

PRELIMINARY PROSPECTUS

Shares

Zillow, Inc.

Class A Common Stock

$ per share

This is the initial public offering of our Class A common stock. We are selling
shares of our Class A common stock. We currently expect the initial public offering price to be between
$ and $ per share. Concurrent with the closing of this offering, existing investors, including funds
affiliated with Technology Crossover Ventures, have agreed to purchase from us in a private placement the number of shares of Class A common stock with an aggregate purchase price of $5,500,000, at a price per share equal to the initial public
offering price.

We have granted the underwriters
an option to purchase up to additional shares of Class A common stock to cover over-allotments.

We intend to apply to list our Class A common stock on the
under the symbol  .

Investing in our Class A common stock involves risks. See Risk Factors beginning on
page 11.

Neither the Securities and
Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Per Share

Total

Initial Public Offering Price

$

$

Underwriting Discounts and Commissions

$

$

Proceeds to Zillow, Inc. (before expenses)

$

$

The underwriters expect to deliver the shares to purchasers on or about
, 2011 through the book-entry facilities of The Depository Trust Company.

You should rely only on the information contained in this prospectus or in any free
writing prospectus filed with the Securities and Exchange Commission. We have not, and the underwriters have not, authorized anyone to provide you with different information. We are not, and the underwriters are not, making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front cover of this prospectus.

The following summary highlights information contained
elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our Class A common stock, you should carefully read this entire prospectus, including our
financial statements and the related notes included in this prospectus and the information set forth under the headings Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of
Operations.

ZILLOW, INC.

Mission

Our mission is to build the most trusted and vibrant
home-related marketplace to empower consumers with information and tools to make intelligent decisions about homes.

Our Company

Zillow is the leading real estate information marketplace. We provide vital information about homes, real estate listings and mortgages
through our website and mobile applications, enabling homeowners, buyers, sellers and renters to connect with real estate and mortgage professionals best suited to meet their needs. We are transforming the way people make home-related decisions.
Zillow provides consumers and real estate professionals an edge in real estate.

We maintain an unwavering commitment to giving consumers free access to as much useful information as possible. Our living database of more than 100 million U.S. homes  including homes for
sale, homes for rent and homes not currently on the market  attracts an active and vibrant community of users. Individuals and businesses that use Zillow have updated information on more than 27 million homes and added more than
50 million home photos, creating exclusive home profiles available nowhere else. These profiles include rich, detailed information about homes, such as property facts, listing information and purchase and sale data. We provide this information
to our users where, when and how they want it, both through our website and through our industry-leading mobile applications that allow consumers to access our information when they are curbside, viewing homes.

Using complex, proprietary automated valuation models, we
provide current home value estimates, or Zestimates, on more than 70 million U.S. homes, and current rental price estimates, or Rent Zestimates, on more than 100 million U.S. homes. Our products and services present residential real
estate data in novel ways that have revolutionized the way consumers search for, find and understand home-related information and make real estate decisions.

Consumers increasingly are turning to the Internet and mobile devices for real estate information. During March 2011, 19.4 million
unique users visited our website and mobile applications, representing year-over-year growth of over 90%. We operate the most popular mobile real estate applications across iPhone, iPad, Android and BlackBerry. During March 2011, Zillow was used on
a mobile device more than 8 million times, with more than 1.4 million homes viewed on mobile devices each day.

Real estate and mortgage professionals are a critical part of the home-related marketplace. We enable consumers to connect with real
estate and mortgage professionals best suited to meet their needs.

Our real estate marketplace benefits from network effects. As more consumers come to our website to use our products and services, more real estate and mortgage professionals contribute content to
distinguish themselves, thereby making our marketplace more useful and attracting additional consumers.

We generate revenues from local real estate professionals, primarily on an individual
subscription basis, and from mortgage professionals and brand advertisers. We have experienced significant revenue growth over the past three years. For the years ended December 31, 2008, 2009 and 2010, we generated revenues of
$10.6 million, $17.5 million and $30.5 million, representing year-over-year growth of 49%, 65% and 74%, respectively.

Our Opportunity

Homes are the center of peoples lives, the focus of some of their most important decisions and often their most valuable assets. In
addition to whether to buy, sell or rent, consumers make many other important home-related decisions throughout their lifetimes, including decisions relating to refinancing or home equity loans, home maintenance and home improvement. Residential
real estate is one of the largest sectors of the U.S. economy and supports a large number of professionals that provide home-related services. We believe the following activities represent large market opportunities for Zillow:



Purchase and Sale. Sales of existing and new homes in the United States in 2010 had an aggregate transaction value of
approximately $1.2 trillion, according to data from the U.S. Census Bureau and the National Association of
REALTORS®, or NAR. Residential real estate brokerage commissions and fees totaled approximately $60 billion
in 2010, as derived by Zillow using data from the U.S. Census Bureau, NAR and REAL Trends. There are more than 1.8 million licensed real estate agents in the United States, according to data published in April 2011 by the Association of Real Estate
License Law Officials. In an effort to acquire new client relationships and sell homes, real estate agents and brokers spent an estimated $8.6 billion on advertising in 2010, according to Borrell Associates.



Rental. The overall size of the U.S. rental market, including rent, utilities and insurance, exceeds $300 billion
annually, based on data from the U.S. Census Bureau and our own estimates.



Home Financing. In 2009 in the United States, 4.6 million purchase loans were originated, representing more than
$852 billion in borrowings, and 8.1 million refinancing and home equity loans were originated, representing more than $1.7 trillion in borrowings, according to the Federal Financial Institutions Examination Council. These loans
generated approximately $26 billion in fees for mortgage lenders and brokers, according to data from the Federal Financial Institutions Examination Council, the Mortgage Bankers Association and our own analysis. There were approximately 266,000
mortgage lenders and brokers in the United States in 2009, according to the Bureau of Labor Statistics.



Home Maintenance and Improvement. Approximately $286 billion was spent on home improvement and repair by U.S.
consumers in 2009 and more than 650,000 businesses earned the majority of their revenue by providing remodeling services, according to the Harvard Joint Center for Housing Studies.

Industry Challenges

Highly Fragmented, Local and Complex Market
 The market for residential real estate transactions and home-related services is highly fragmented, local and complex. Each home has unique characteristics, including location, value, size, style, age and condition. Each consumer approaches
home-related transactions with a personal set of objectives, priorities and values. Real estate agents generally operate in local markets as independent contractors with different experience and skills. These conditions create challenges for
consumers and real estate and mortgage professionals alike.

Absence of Consumer Orientation  Historically, consumers had minimal access to comprehensive and objective residential real estate data, even though many home-related decisions are
extraordinarily information-intensive. While real estate and mortgage professionals had some data, consumers did not have free, independent and easy access to it. Even when accessible, the data was difficult to interpret and analyze.

Increasing Role of the Internet and Mobile Technologies  Consumers
increasingly are turning to the Internet and mobile devices for real estate information. With the widespread adoption of mobile and location-based technologies, consumers expect home-related information to be available on their mobile devices where,
when and how they want it.

The Zillow Edge

We are transforming the way consumers make
home-related decisions and connect with real estate and mortgage professionals. We maintain an unwavering commitment to giving consumers free access to as much useful information as possible, and to providing transparency for all market
participants. Our living database of homes, our Zestimates and our Rent Zestimates form the foundation of our products and services.

Living Database of Homes  Our dynamic and comprehensive living database includes detailed information on more than
100 million U.S. homes, or most U.S. homes, and includes homes for sale, for rent and recently sold, as well as properties not currently on the market. This database is central to the value we provide to consumers and real estate and mortgage
professionals. It contains extensive information that users can search, through an easy-to-use interface, to identify, analyze and compare homes. It includes information such as property facts, listing information and purchase and sale data. We
apply extensive computer analytics to the data and transform it into information that is accessible, understandable and useful. We refer to the database as living because the information is continuously updated by the combination of our
proprietary algorithms, synthesis of third-party data from hundreds of sources, and through improvements by us and, importantly, by our community of users.

Zestimates and Rent Zestimates  We have developed industry-leading automated home valuation models that use advanced
statistical methods and complex, proprietary algorithms. We use these models to provide current home value estimates, or Zestimates, on more than 70 million U.S. homes, and current rental price estimates, or Rent Zestimates, on more than
100 million U.S. homes.

Competitive
Advantages

We believe we have the following
competitive advantages:



Inimitable Database. Our living database of homes is the result of years of substantial investment, sophisticated
economic and statistical analysis, complex data aggregation and millions of user contributions.



Independent Market Position and Consumer Focus. Zillow has been built independently of any real estate industry group. We
believe our independence enables us to create compelling products and services with broad consumer appeal.



Powerful Brand and Scale. We have established a powerful brand identity and built a large user community in a short time.
More than two-thirds of our traffic is direct, with demonstrated consumer intent to visit the Zillow brand. During March 2011, 19.4 million unique users visited our website and mobile applications, representing year-over-year growth of over 90%,
which we achieved with virtually no advertising expense to date.



Consumer-Oriented Mortgage Marketplace. Unlike other sources of mortgage rate quotes, in Zillow Mortgage Marketplace
consumers can anonymously submit loan requests, receive an unlimited number of personalized mortgage quotes and then choose to contact these lenders on their own terms. Consumers submitted nearly one million mortgage loan requests in Zillow
Mortgage Marketplace in the quarter ended March 31, 2011.

Personalized Experience. We present consumers and real estate and mortgage professionals with many opportunities to
personalize their Zillow experience, leading to more informed home shopping and financing decisions.



Mobile Leadership. We operate the most popular mobile real estate applications across iPhone, iPad, Android and
BlackBerry that enable people to access and analyze information about homes curbside  where, when and how they want it.



Proven Management Team. We believe the extensive experience and depth of our management team are distinct competitive
advantages in the complex and evolving industry in which we compete.

Enhance Our Living Database. Enhance the information in our database of homes, and use it as the foundation for new
analyses, insights and tools to inform consumers throughout the home ownership lifecycle.



Deepen and Strengthen Our Marketplace. Deepen and strengthen our marketplace by creating new opportunities for
high-quality consumer-initiated connections with real estate and mortgage professionals when consumers want their services.

Measuring unique users is important to us because our marketplace revenues depend in part on our ability to enable our users to connect
with real estate and mortgage professionals and our display revenues depend in part on the number of impressions delivered. Furthermore, our community of users improves the quality of our living database with their contributions. We define a unique
user as a user who visits our website or mobile applications at least once during a calendar month, as measured by our Omniture analytical tools.

The number of Premier Agent subscribers is an important
driver of revenue growth because each subscriber pays us a monthly fee to participate in the Premier Agent program. We define a Premier Agent subscriber as an agent with a paid subscription at the end of a period.

At December 31,

2008

2009

2010

2008 to 2009% Change

2009 to 2010% Change

Premier Agent Subscribers

26

2,764

8,102

*

193

%

*

Not meaningful because the Premier Agent program was launched in October 2008.

Risks

Our business is subject to a number of risks of which you
should be aware before making an investment decision. These risks are discussed more fully in the section of this prospectus titled Risk Factors, and include but are not limited to the following:



We have incurred significant operating losses in the past and we may not be able to generate sufficient revenue to be profitable over the long term.



If real estate and mortgage professionals or other advertisers reduce or end their advertising spending with us and we are unable to attract new
advertisers, our business would be harmed.



If we do not innovate and provide products and services that are attractive to our users and to our advertisers, our business could be harmed.



We may be unable to increase awareness of the Zillow brand cost-effectively, which could harm our business.



We are dependent on the real estate industry, and changes to that industry, or declines in the real estate market or increases in mortgage interest
rates, could reduce the demand for our products and services.

Recent Corporate Developments

On February 3, 2011, we launched our strategic relationship with Yahoo! Real Estate, through which we provide real estate listings and have exclusive rights to sell subscription advertising and certain
graphical advertising throughout the Yahoo! Real Estate website.

During March 2011, we acquired the operating assets of Postlets LLC, a real estate agent and rental property manager marketing service.

Corporate Information

Zillow, Inc. was incorporated in Washington in December
2004. Our principal executive offices are located at 999 Third Avenue, Suite 4600, Seattle, Washington 98104, and our telephone number is (206) 470-7000. Our website address is www.zillow.com. In addition, we maintain a
Facebook page at www.facebook.com/zillow and a twitter feed at www.twitter.com/zillow. Information contained on, or that can be accessed through, our website, Facebook page or twitter feed does not constitute part of this prospectus
and inclusions of our website address, Facebook page address and twitter feed address in this prospectus are inactive textual references only.

Zillow, Zillow.com, Zestimate, Make Me Move, and the Zillow logo are registered trademarks of Zillow in the United States and in some other countries. Other
trademarks and trade names referred to in this prospectus are the property of their respective owners.

shares (or shares if the underwriters exercise their
over-allotment option in full)

Class A common stock offered by us in the concurrent private placement

Concurrent with the closing of this offering, funds affiliated with Technology Crossover Ventures, and PAR Investment Partners, L.P., will purchase from us in a private placement
the number of shares of our Class A common stock with an aggregate purchase price equal to $5.0 million and $0.5 million, respectively, at a price per share equal to the initial public offering price. Based on an assumed initial public
offering price of $ per share, which is the midpoint of the range set forth on the cover page of this prospectus, this would be
shares. The sale of these shares to funds affiliated with Technology Crossover Ventures and to PAR Investment Partners, L.P. will not be registered in this offering. We refer
to the private placement of these shares of Class A common stock as the concurrent private placement.

Class A common stock to be outstanding after this offering and the concurrent private placement

shares (or shares if the underwriters exercise their
over-allotment option in full)

Class B common stock to be outstanding after this offering and the concurrent private placement

32,205,715 shares

Total Class A common stock and Class B common stock to be outstanding after this offering and the concurrent private
placement

shares (or shares if the underwriters exercise their
over-allotment option in full)(1)

Use of proceeds

We plan to use the net proceeds from this offering and the proceeds of the concurrent private placement for general corporate purposes, including working capital. We also may use a
portion of these proceeds to acquire or make investments in complementary businesses, products or technologies. See Use of Proceeds.

Risk factors

See Risk Factors beginning on page 11 and the other information included in this prospectus for a discussion of risk factors you should carefully consider before
deciding to invest in our Class A common stock.

The shares of our Class B common stock outstanding after the offering and the concurrent private placement will represent approximately % of the
total number of shares of our Class A common stock and Class B common stock outstanding after this offering and the concurrent private placement, and % of the combined voting power of our Class A common stock
and Class B common stock outstanding after this offering and the concurrent private placement.

The number of shares outstanding after this offering and the concurrent private placement is based on 43,510,523 shares of Class A
common stock outstanding and 32,205,715 shares of Class B common stock outstanding as of December 31, 2010 and, unless otherwise indicated, excludes, as of December 31, 2010:



shares of our Class A common stock reserved for future issuance under our
2011 Incentive Plan, which we plan to adopt in connection with this offering, as more fully described in Executive Compensation  Employee Benefit Plans;



16,935,951 shares of our Class A common stock issuable upon the exercise of options, outstanding as of December 31, 2010, to purchase shares
of our Class A common stock at a weighted average exercise price of $1.19 per share;



3,695,642 shares of our Class A common stock issuable upon the exercise of outstanding options granted after December 31, 2010 to purchase
shares of our Class A common stock at a weighted average exercise price of $1.15 per share; and



700,000 shares of our Class A common stock issued in March 2011 in connection with a purchase of assets.

Except as otherwise indicated, all information in this
prospectus assumes:



the reclassification of our common stock into our Class A common stock;



that our amended and restated articles of incorporation, which we will file in connection with the completion of this offering, and amended and
restated bylaws, which we will adopt in connection with the completion of this offering, are in effect;



the automatic conversion of all outstanding shares of our convertible preferred stock into 31,353,797 shares of our Class A common stock to be
effected upon the effectiveness of the registration statement of which this prospectus is a part;



the automatic conversion of all outstanding shares of our Class C common stock into 7,794,285 shares of our Class A common stock to be
effected upon the effectiveness of the registration statement of which this prospectus is a part; and



no exercise by the underwriters of their option to purchase an additional
shares of our Class A common stock to cover over-allotments, if any.

The following tables present summary historical financial
data for our business. You should read the financial data set forth below in conjunction with the information under Selected Financial and Other Data and Managements Discussion and Analysis of Financial Condition and Results
of Operations and our financial statements and related data included elsewhere in this prospectus. We have derived the following statements of operations data for the years ended December 31, 2008, 2009 and 2010 and the balance sheet data
as of December 31, 2010 from our audited financial statements included elsewhere in this prospectus. Our historical results are not necessarily indicative of our results to be expected in any future period. Pro forma net loss per share
attributable to common shareholders has been calculated assuming the automatic conversion of all outstanding shares of our convertible preferred stock into 31,353,797 shares of our Class A common stock and the automatic conversion of all outstanding
shares of our Class C common stock into 7,794,285 shares of our Class A common stock, both to be effected upon the effectiveness of the registration of which this prospectus is a part.

Year Ended December 31,

2008

2009

2010

(in thousands, except per share data)

Statement of Operations Data:

Revenues

$

10,593

$

17,491

$

30,467

Costs and expenses:

Cost of revenues(1)

4,198

4,042

4,973

Sales and marketing(1)

7,481

9,654

14,996

Technology and development(1)

15,048

11,260

10,651

General and administrative(1)

5,770

5,501

6,684

Total costs and expenses

32,497

30,457

37,304

Loss from operations

(21,904

)

(12,966

)

(6,837

)

Other income

687

111

63

Net loss

$

(21,217

)

$

(12,855

)

$

(6,774

)

Net loss per share attributable to common shareholders  basic and diluted

See Adjusted EBITDA below for more information and for a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure
calculated and presented in accordance with U.S. generally accepted accounting principles, or GAAP.

The following table sets forth our balance sheet data as of December 31, 2010:



on an actual basis;



on a pro forma basis, giving effect to the automatic conversion of all outstanding shares of our convertible preferred stock into 31,353,797 shares of
our Class A common stock and the automatic conversion of all outstanding shares of our Class C common stock into 7,794,285 shares of our Class A common stock, both to be effected upon the effectiveness of the registration statement of
which this prospectus is a part; and



on a pro forma, as adjusted basis, to give effect to the issuance and sale by us of
shares of our Class A common stock in this offering and the concurrent private placement, and our receipt of the net proceeds from the sale of such shares at an assumed
initial public offering price of $ per share, which is the midpoint of the range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts
and commissions and estimated expenses payable in connection with this offering.

As of December 31,

Actual2010

Pro Forma2010(unaudited)

Pro Forma,as Adjusted2010(1)(unaudited)

(in thousands)

Balance Sheet Data:

Cash and cash equivalents and short-term investments

$

13,777

$

13,777

$

Property and equipment, net

4,929

4,929

4,929

Working capital

11,941

11,941

Total assets

24,013

24,013

Convertible preferred stock

4





Common stock

4

8

Total shareholders equity

17,448

17,448

(1)

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share would
increase (decrease) the amount of cash and cash equivalents and short-term investments, working capital, total assets and total shareholders equity by approximately $
million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable in connection with this
offering. Similarly, each increase (decrease) of one million shares in the number of shares of Class A common stock offered by us would increase (decrease) the amount of cash and cash equivalents and short-term investments, working capital,
total assets and total shareholders equity by approximately $ million, assuming that the assumed initial public offering price remains the same and after deducting
underwriting discounts and commissions and estimated offering expenses payable in connection with this offering. The pro forma, as adjusted, information discussed above is illustrative only and will be adjusted based on the actual public offering
price and other terms of this offering determined at pricing.

Adjusted EBITDA

To provide investors with additional information regarding our financial results, we have disclosed within this prospectus Adjusted EBITDA, a non-GAAP financial measure. We have provided a reconciliation
below of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure.

We have included Adjusted EBITDA in this prospectus because it is a key metric used by our
management and board of directors to measure operating performance and trends and to prepare and approve our annual budget. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA facilitates operating performance comparisons
on a period-to-period basis.

Our use of Adjusted
EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

Adjusted EBITDA does not consider the potentially dilutive impact of share-based compensation;



Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and
Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; and



Other companies, including companies in our own industry, may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a
comparative measure.

Because
of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net loss and our other GAAP results.

The following table presents a reconciliation of Adjusted
EBITDA to net loss for each of the periods presented.

An investment in our Class A common stock involves a
high degree of risk. You should carefully consider the following risk factors and all other information contained in this prospectus before purchasing our Class A common stock. Any of these risks could harm our business, results of operations,
and financial condition and our prospects. In addition, the trading price of our Class A common stock could decline and you may lose some or all of your investment. See Special Note Regarding Forward-Looking Statements.

Risks Related to Our Business

We have incurred significant operating losses in the past and we may
not be able to generate sufficient revenue to be profitable over the long term.

Since our inception in December 2004, we have incurred significant net operating losses and, as of December 31, 2010, we had an accumulated deficit of $78.7 million. Although our annual revenues
grew from approximately $10.6 million in 2008 to approximately $30.5 million in 2010, we expect that our revenue growth rate will decline in the future as a result of a variety of factors, including the maturation of our business. At the
same time, we also expect our costs to increase in future periods as we continue to expend substantial financial resources to develop and expand our business, including on:



product development;



sales and marketing;



our technology infrastructure;



strategic opportunities, including commercial relationships and acquisitions; and



general administration, including legal and accounting expenses related to being a public company.

These investments may not result in increased revenue or
growth in our business. If we fail to continue to grow our revenue and overall business and to manage our expenses, we may continue to incur significant losses in the future and not be able to achieve or maintain profitability.

If real estate and mortgage professionals or other advertisers reduce
or end their advertising spending with us and we are unable to attract new advertisers, our business would be harmed.

Our current financial model depends on advertising revenues generated almost entirely through sales to real estate agents and brokerages,
mortgage lenders and advertisers in categories relevant to real estate. Our ability to attract and retain advertisers, and ultimately to generate advertising revenue, depends on a number of factors, including:



increasing the number of consumers of our products and services;



competing effectively for advertising dollars with other online media companies;



continuing to develop our advertising products and services;



keeping pace with changes in technology and with our competitors; and



offering an attractive return on investment to our advertisers for their advertising spending with us.

While real estate agents participating in our
subscription-based Premier Agent program generally commit to contract terms of six or 12 months, we do not have long-term contracts with most of our other advertisers. Those advertisers could choose to modify or discontinue their relationships
with us with little or no advance notice. In addition, as existing subscriptions for our Premier Agent program expire, we may not be successful in renewing these subscriptions, securing new subscriptions or increasing the amount of revenue we earn
for a given

subscription over time. We may not succeed in capturing a greater share of our advertisers spending if we are unable to convince advertisers of the effectiveness or superiority of our
products as compared to alternatives, including traditional offline advertising media such as television and newspapers. If current advertisers reduce or end their advertising spending with us and we are unable to attract new advertisers, our
advertising revenues and business, results of operations and financial condition would be harmed.

If we do not innovate and provide products and services that are attractive to our users and to our advertisers, our business could be harmed.

Our success depends on our continued innovation to provide
products and services that make our website and mobile applications useful for consumers and real estate and mortgage professionals and attractive to our advertisers. As a result, we must continually invest significant resources in research and
development in order to improve the attractiveness and comprehensiveness of our products and services and effectively incorporate new Internet and mobile technologies into them. If we are unable to provide products and services that users, including
real estate professionals, want to use, then users may become dissatisfied and use competitors websites and mobile applications. If we are unable to continue offering innovative products and services, we may be unable to attract additional
users and advertisers or retain our current users and advertisers, which could harm our business, results of operations and financial condition.

We may be unable to increase awareness of the Zillow brand cost-effectively, which could harm our business.

We rely heavily on the Zillow brand, which we believe is a
key asset of our company. Awareness and perceived quality and differentiation of the Zillow brand are important aspects of our efforts to attract and expand the number of consumers who use our website and mobile applications. Should the competition
for awareness and brand preference increase among online real estate information providers, we may not be able to successfully maintain or enhance the strength of our brand. If in the future we choose to engage in a paid advertising campaign to
further promote the Zillow brand, such efforts may not be successful. If we are unable to maintain or enhance user and advertiser awareness of our brand cost-effectively, our business, results of operations and financial condition could be harmed.

We are dependent on the real estate industry, and changes
to that industry, or declines in the real estate market or increases in mortgage interest rates, could reduce the demand for our products and services.

Our financial prospects are significantly dependent on real estate shoppers using our services. Real estate shopping patterns depend on
the overall health of the real estate market, which has been in decline since 2007. Changes to the regulation of the real estate industry, including mortgage lending, may negatively impact the prevalence of home ownership. Changes to the real estate
industry, declines in the real estate market or increases in mortgage interest rates could reduce demand for our services. Real estate markets also may be negatively impacted by a significant natural disaster, such as earthquake, fire, flood or
other disruption.

We may be unable to maintain or establish
relationships with real estate brokerages, real estate listing aggregators, multiple listing services, apartment management companies, home builders and other third-party listing providers, which could limit the information we are able to provide to
our users.

Our ability to attract users
to our website and mobile applications depends to some degree on providing a robust number of for sale and rental listings. To provide these listings, we maintain relationships with real estate brokerages, real estate listing aggregators, multiple
listing services, apartment management companies, home builders, other third-party listing providers, and homeowners and their real estate agents to include listing data in our services. Many of our agreements with real estate listing providers are
short-term agreements that may be terminated with limited notice. The loss of some of our existing relationships with listing providers, whether due to termination of agreements or otherwise, or an inability to continue to add new listing providers,
may cause our listing data to omit information important to users of our products and services. This could reduce user

confidence in the sale and rental data we provide and make us less popular with consumers, which could harm our business, results of operations and financial condition.

We may be unable to maintain or establish relationships with data
providers, which could limit the information we are able to provide to our users and impair our ability to attract or retain users.

We use data under license from certain third-party providers in order to enable the development, maintenance and improvement of our
information services, including Zestimates and Rent Zestimates and our living database of homes. We have invested significant time and resources to develop proprietary algorithms, valuation models, software and practices to use and improve upon this
specific data. We may be unable to renew our licenses with these data providers, or we may be able to do so only on terms that are less favorable to us, which could harm our ability to continue to develop, maintain and improve these information
services and could harm our business, results of operations and financial condition.

We may in the future be subject to disputes regarding the accuracy of our Zestimates and Rent Zestimates.

We provide our users with Zestimate and Rent Zestimate home
and rental valuations. A Zestimate is our estimated current market value of a home based on proprietary automated valuation models that apply advanced algorithms to analyze our data; it is not an appraisal. A Rent Zestimate is our estimated current
monthly rental price of a home, using similar automated valuation models that we have designed to address the unique attributes of rental homes. From time to time, users disagree with our Zestimates and Rent Zestimates. Any such disagreements could
result in distraction from our business or potentially harm our reputation and could result in legal disputes.

We face competition to attract consumers to our website and mobile applications, which could impair our ability to continue to grow the number of users who use our website and mobile applications,
which would harm our business, results of operations and financial condition.

Our success depends on our ability to continue to attract additional consumers to our website and mobile applications. Our existing and potential competitors include companies that operate, or could
develop, national and local real estate and mortgage websites. These companies could devote greater technical and other resources than we have available, have a more accelerated time frame for deployment and leverage their existing user bases and
proprietary technologies to provide products and services that consumers might view as superior to our offerings. Any of our future or existing competitors may introduce different solutions that attract consumers or provide solutions similar to our
own but with better branding or marketing resources. If we are unable to continue to grow the number of consumers who use our website and mobile applications, our business, results of operations and financial condition would be harmed.

We may be unable to compete successfully against our existing or future
competitors in attracting advertisers, which could harm our business, results of operations and financial condition.

We compete to attract advertisers with media sites, including websites dedicated to providing real estate and mortgage information and
services to real estate professionals and consumers, and major Internet portals, general search engines and social media sites, as well as other online companies. We also compete for a share of advertisers overall marketing budgets with
traditional media such as television, magazines, newspapers and home/apartment guide publications, particularly with respect to advertising dollars spent at the local level by real estate professionals to advertise their qualifications and listings.
Large companies with significant brand recognition have large numbers of direct sales personnel and substantial proprietary advertising inventory and web traffic, which may provide a competitive advantage. To compete successfully for advertisers
against future and existing competitors, we must continue to invest resources in developing our advertising platform and proving the effectiveness and relevance of our advertising products and services. Pressure from competitors seeking to acquire a
greater share of our advertisers overall marketing budget could adversely affect our pricing

and margins, lower our revenue, and increase our research and development and marketing expenses. If we are unable to compete successfully against our existing or future competitors, our
business, financial condition or results of operations would be harmed.

Our dedication to making decisions based primarily on the best interests of consumers may cause us to forgo short-term gains.

Our guiding principle is to build our business by making decisions based primarily upon the best interests of
consumers, which we believe has been essential to our success in increasing our user growth rate and engagement and has served the long-term interests of our company and our shareholders. In the past, we have forgone, and we will in the future
forgo, certain expansion or short-term revenue opportunities that we do not believe are in the best interests of consumers, even if such decisions negatively impact our results of operations in the short term. In addition, our philosophy of putting
consumers first may negatively impact our relationships with our existing or prospective advertisers. This could result in a loss of advertisers which could harm our revenue and results of operations. Our principle of making decisions based
primarily upon the best interests of consumers may not result in the long-term benefits that we expect, in which case our user traffic and engagement, business and results of operations could be harmed.

If we fail to manage our growth effectively, our brand, results of
operations and business could be harmed.

We have experienced rapid growth in our headcount and operations, which places substantial demand on management and our operational
infrastructure. Most of our employees have been with us for fewer than two years. As we continue to grow, we must effectively integrate, develop and motivate a large number of new employees, while maintaining the beneficial aspects of our company
culture. In particular, we intend to pursue strategic opportunities and make substantial investments in our technology and development and sales and marketing organizations. If we do not manage the growth of our business and operations effectively,
the quality of our services and efficiency of our operations could suffer, which could harm our brand, results of operations and overall business.

If use of the Internet and mobile technology, particularly with respect to online real estate products and services, does not continue to increase
as rapidly as we anticipate, our business could be harmed.

Our future success is substantially dependent on the continued use of the Internet and mobile technology as effective media of business and communication by our consumers. Internet and mobile technology
use may not continue to develop at historical rates, and consumers may not continue to use the Internet or mobile technology as media for information exchange. Further, these media may not be accepted as viable long-term outlets for information for
a number of reasons, including actual or perceived lack of security of information and possible disruptions of service or connectivity. If consumers begin to access real estate information through other media and we fail to innovate, our business
may be negatively impacted.

We rely on the performance of
highly skilled personnel, and if we are unable to attract, retain and motivate well-qualified employees, our business could be harmed.

We believe our success has depended, and continues to depend, on the efforts and talents of our management and our highly skilled team of
employees, including our software engineers, statisticians, marketing professionals and advertising sales staff. Our future success depends on our continuing ability to attract, develop, motivate and retain highly qualified and skilled employees.
The loss of any of our senior management or key employees could materially adversely affect our ability to build on the efforts they have undertaken and to execute our business plan, and we may not be able to find adequate replacements. We cannot
ensure that we will be able to retain the services of any members of our senior management or other key employees. We do not maintain any key person life insurance policies. If we do not succeed in attracting well-qualified employees or retaining
and motivating existing employees, our business could be harmed.

Any significant disruption in service on our website or in our network could damage our reputation and
result in a loss of users of our products and services and of advertisers, which could harm our business, results of operations and financial condition.

Our brand, reputation and ability to attract users and
advertisers depend on the reliable performance of our network infrastructure and content delivery processes. We have experienced minor interruptions in these systems in the past, including server failures that temporarily slowed the performance of
our website and mobile applications, and we may experience interruptions in the future. Interruptions in these systems, whether due to system failures, computer viruses or physical or electronic break-ins, could affect the security or availability
of our products and services on our website and mobile applications and prevent or inhibit the ability of users to access our services. Problems with the reliability or security of our systems could harm our reputation, result in a loss of users of
our products and services and of advertisers and result in additional costs, any of which could harm our business, results of operations and financial condition.

Substantially all of the communications, network and computer
hardware used to operate our website are located at facilities in the area. We do not own or control the operation of these facilities. Our systems and operations are vulnerable to damage or interruption from fire, flood, power loss,
telecommunications failure, terrorist attacks, acts of war, electronic and physical break-ins, computer viruses, earthquakes and similar events. The occurrence of any of the foregoing events could result in damage to our systems and hardware or
could cause them to fail completely, and our insurance may not cover such events or may be insufficient to compensate us for losses that may occur.

A failure of our systems at one site could result in reduced functionality for our users, and a total failure of our systems could cause
our website or mobile applications to be inaccessible. Problems faced by our third-party web hosting providers with the telecommunications network providers with which they contract or with the systems by which they allocate capacity among their
customers, including us, could adversely affect the experience of our users. Our third-party web hosting providers could decide to close their facilities without adequate notice. Any financial difficulties, such as bankruptcy reorganization, faced
by our third-party web hosting providers or any of the service providers with whom they contract may have negative effects on our business, the nature and extent of which are difficult to predict. If our third-party web hosting providers are unable
to keep up with our growing needs for capacity, this could harm our business.

We do not carry business interruption insurance sufficient to compensate us for the potentially significant losses, including the potential harm to the future growth of our business that may result from
interruptions in our service as a result of system failures. Any errors, defects, disruptions or other performance problems with our services could harm our reputation and harm our business, results of operations and financial condition.

We may make acquisitions and investments, which could result in
operating difficulties, dilution and other harmful consequences.

We expect to evaluate a wide array of potential strategic opportunities. For example, in March 2011, we acquired the operating assets of a real estate agent and rental property manager marketing service.
Any transactions that we enter into could be material to our financial condition and results of operations. The process of integrating an acquired company, business or technology could create unforeseen operating difficulties and expenditures. The
areas where we face risks include:

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diversion of management time and focus from operating our business to acquisition integration challenges;

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implementation or remediation of controls, procedures and policies at the acquired company;

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coordination of product, engineering and sales and marketing functions;

liability for activities of the acquired company before the acquisition;



litigation or other claims arising in connection with the acquired company; and



in the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic,
currency, political and regulatory risks associated with specific countries.

Our failure to address these risks or other problems encountered in connection with our past or future acquisitions and investments could cause us to fail to realize the anticipated benefits of such
acquisitions or investments, incur unanticipated liabilities and harm our business, results of operations and financial condition.

We are subject to a variety of federal and state laws, many of which are unsettled and still developing and which could subject us to claims or
otherwise harm our business.

We are
subject to a variety of federal and state laws that are continuously evolving and developing, including laws regarding the real estate and mortgage industries, Internet-based businesses and businesses that rely on advertising. These laws can be
costly to comply with, can require significant management time and effort, and can subject us to claims or other remedies. These laws may conflict with each other and if we comply with the laws of one jurisdiction, we may find that we are violating
laws of another jurisdiction. Additionally, our ability to provide a specific target audience to advertisers is a significant competitive advantage. Any legislation reducing this ability would have a negative impact on our business and results of
operations.

If we are unable to comply with these
laws or regulations, if we become liable under these laws or regulations or if unfavorable regulations or unfavorable interpretations of existing regulations by courts or regulatory bodies are implemented, we could be directly harmed and forced to
implement new measures to reduce our exposure to this liability and it could cause the development of product or service offerings in affected markets to become impractical. This may require us to expend substantial resources or to discontinue
certain products or services, limit our ability to expand our product and services offerings or expand into new markets or otherwise harm our business, results of operations and financial condition. In addition, the increased attention focused upon
liability issues as a result of lawsuits and legislative proposals could harm our reputation or otherwise impact the growth of our business. Any costs incurred as a result of this potential liability could harm our business and results of
operations.

We assist with the processing of
customer credit card transactions which results in us receiving personally identifiable information. This information is increasingly subject to legislation and regulation in the United States. This legislation and regulation is generally intended
to protect the privacy and security of personal information, including credit card information, that is collected, processed and transmitted. We could be adversely affected if government regulations require us to significantly change our business
practices with respect to this type of information.

We may
be unable to continue to use the domain names that we use in our business, or prevent third parties from acquiring and using domain names that infringe on, are similar to, or otherwise decrease the value of our brand or our trademarks or service
marks.

We have registered domain names
for our website that we use in our business, such as Zillow.com. If we lose the ability to use a domain name, we may incur significant expenses to market our products and services under a new domain name, which could harm our business. In addition,
our competitors could attempt to capitalize on our brand recognition by using domain names similar to ours. Domain names similar to ours have been registered in the United States and elsewhere. We may be unable to prevent third parties from
acquiring and using domain names that infringe on, are similar to, or otherwise decrease the value of our brand or our trademarks or service marks. Protecting and enforcing our rights in our domain names and determining the rights of others may
require litigation, which could result in substantial costs and diversion of managements attention.

We may be unable to adequately protect our intellectual property, which could harm the value of our
brand and our business.

We regard our
intellectual property as critical to our success, and we rely on trademark, copyright and patent law, trade secret protection and contracts to protect our proprietary rights. If we are not successful in protecting our intellectual property, the
value of our brand and our business, results of operations and financial condition could be harmed.

While we believe that our issued patents and pending patent applications help to protect our business, there can be no assurance that our operations do not, or will not, infringe valid, enforceable
patents of third parties or that competitors will not devise new methods of competing with us that are not covered by our patents or patent applications. There also can be no assurance that our patent applications will be approved, that any patents
issued will adequately protect our intellectual property, that such patents will not be challenged by third parties or found to be invalid or unenforceable or that our patents will be effective in preventing third parties from utilizing a
copycat business model to offer the same products or services. Moreover, we rely on intellectual property and technology developed or licensed by third parties, and we may not be able to obtain licenses and technologies from these third
parties on reasonable terms or at all.

Effective
trademark, service mark, copyright and trade secret protection may not be available in every country in which our products and services may be provided. The laws of certain countries do not protect proprietary rights to the same extent as the laws
of the United States and, therefore, in certain jurisdictions, we may be unable to protect intellectual property and our proprietary technology adequately against unauthorized third-party copying or use, which could harm our competitive position. We
have licensed in the past, and expect to license in the future, certain of our proprietary rights, such as trademarks or copyrighted material, to third parties. These licensees may take actions that might diminish the value of our proprietary rights
or harm our reputation, even if we have agreements prohibiting such activity. To the extent third parties are obligated to indemnify us for breaches of our intellectual property rights, these third parties may be unable to meet these obligations.
Any of these events could harm our business, results of operations or financial condition.

Intellectual property disputes are costly to defend and could harm our business, results of operations, financial condition and reputation.

From time to time, we face allegations that we have
infringed the trademarks, copyrights, patents and other intellectual property rights of third parties. We are currently subject to patent infringement claims. These claims allege, among other things, that aspects of our technology infringe upon the
plaintiffs patents. If we are not successful in defending ourselves against these claims, we may be required to pay damages and may be subject to injunctions, each of which could harm our business, results of operations, financial condition
and reputation. We may be subject to future claims or allegations relating to our intellectual property rights. As we grow our business and expand our operations we expect that we will continue to be subject to intellectual property claims and
allegations. Patent and other intellectual property disputes or litigation may be protracted and expensive, and the results are difficult to predict and may require us to stop offering certain products, services or features, purchase licenses which
may be expensive to procure or modify our products or services. In addition, patent or other intellectual property disputes or litigation may result in significant settlement costs. Any of these events could harm our business, results of operations,
financial condition and reputation.

In addition,
we use open source software in our services and will continue to use open source software in the future. From time to time, we may be subject to claims brought against companies that incorporate open source software into their products or services,
claiming ownership of, or demanding release of, the source code, the open source software and/or derivative works that were developed using such software, or otherwise seeking to enforce the terms of the applicable open source license. These claims
could also result in litigation, require us to purchase a costly license or require us to devote additional research and development resources to changing our products or services, any of which would have a negative effect on our business and
results of operations.

Even if these matters do not result in litigation or are resolved in our favor or without
significant cash settlements, the time and resources necessary to resolve them could harm our business, results of operations, financial condition and reputation.

Confidentiality agreements with employees and others may not adequately
prevent disclosure of trade secrets and other proprietary information.

In order to protect our technologies and processes, we rely in part on confidentiality agreements with our employees, licensees, independent contractors and other advisors. These agreements may not
effectively prevent disclosure of confidential information, including trade secrets, and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover our trade
secrets and proprietary information, and in such cases we could not assert any trade secret rights against such parties. To the extent that our employees, contractors or other third parties with whom we do business use intellectual property owned by
others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. The loss of trade secret protection could make it easier for third parties to compete with our products by copying functionality. In
addition, any changes in, or unexpected interpretations of, intellectual property laws may compromise our ability to enforce our trade secret and intellectual property rights. Costly and time-consuming litigation could be necessary to enforce and
determine the scope of our proprietary rights, and failure to obtain or maintain protection of our trade secrets or other proprietary information could harm our business, results of operations, reputation and competitive position.

We may be unable to halt the operations of websites that aggregate or
misappropriate our data.

From time to
time, third parties have misappropriated our data through website scraping, robots or other means and aggregated this data on their websites with data from other companies. In addition, copycat websites have misappropriated data on our network and
attempted to imitate our brand or the functionality of our website. When we have become aware of such websites, we have employed technological or legal measures in an attempt to halt their operations. However, we may be unable to detect all such
websites in a timely manner and, even if we could, technological and legal measures may be insufficient to halt their operations. In some cases, particularly in the case of websites operating outside of the United States, our available remedies may
not be adequate to protect us against the impact of the operation of such websites. Regardless of whether we can successfully enforce our rights against the operators of these websites, any measures that we may take could require us to expend
significant financial or other resources, which could harm our business, results of operations or financial condition. In addition, to the extent that such activity creates confusion among consumers or advertisers, our brand and business could be
harmed.

If our security measures are compromised, consumers
may curtail use of our products and services and advertisers may reduce their advertising on our website.

Our products and services involve the storage and transmission of users information, some of which may be private, and security
breaches could expose us to a risk of loss or exposure of this information, which could result in potential liability and litigation. For example, a hacker could steal a users profile password and manipulate information about that users
home or post to a forum while posing as that user. Like all websites, our website is vulnerable to computer viruses, break-ins, phishing attacks, attempts to overload our servers with denial-of-service or other attacks and similar disruptions from
unauthorized use of our computer systems, any of which could lead to interruptions, delays, or website shutdowns, causing loss of critical data or the unauthorized disclosure or use of personal or other confidential information. If we experience
compromises to our security that result in website performance or availability problems, the complete shutdown of our website, or mobile applications, or the loss or unauthorized disclosure of confidential information, our users and advertisers may
lose trust and confidence in us, and users may decrease the use of our website or stop using our website in its entirety, and advertisers may decrease or stop advertising on our website. Further, outside parties may attempt to fraudulently induce
employees, users or advertisers to disclose sensitive information in order to gain access to

our information or our users or advertisers information. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently,
often are not recognized until launched against a target and may originate from less regulated and remote areas around the world, we may be unable to proactively address these techniques or to implement adequate preventative measures. Any or all of
these issues could negatively impact our ability to attract new users and increase engagement by existing users, cause existing users to curtail or stop use of our products or services or close their accounts, cause existing advertisers to cancel
their contracts, or subject us to third-party lawsuits, regulatory fines or other action or liability, thereby harming our business, results of operations and financial condition.

We are subject to a number of risks related to credit card and debit
card payments we accept.

We accept
payments through credit and debit card transactions. For credit and debit card payments, we pay interchange and other fees, which may increase over time. An increase in those fees would require us to either increase the prices we charge or suffer an
increase in our operating expenses, either of which could harm our business, financial condition and results of operations.

We depend on processing vendors to complete credit and debit card transactions. If we or our processing vendors fail to maintain adequate
systems for the authorization and processing of credit card transactions, it could cause one or more of the major credit card companies to disallow our continued use of their payment products. In addition, if these systems fail to work properly and,
as a result, we do not charge our customers credit cards on a timely basis or at all, our business, revenue, results of operations and financial condition could be harmed.

We are also subject to payment card association operating
rules, certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it more difficult for us to comply. We are required to comply with payment card industry security standards. Failing to
comply with those standards may violate payment card association operating rules, federal and state laws and regulations, and the terms of our contracts with payment processors. Any failure to comply fully also may subject us to fines, penalties,
damages and civil liability, and may result in the loss of our ability to accept credit and debit card payments. Further, there is no guarantee that such compliance will prevent illegal or improper use of our payment systems or the theft, loss, or
misuse of data pertaining to credit and debit cards, card holders and transactions.

If we fail to adequately control fraudulent credit card transactions, we may face civil liability, diminished public perception of our security measures and significantly higher credit card-related costs,
each of which could harm our business, results of operations and financial condition.

If we are unable to maintain our chargeback rate or refund rates at acceptable levels, our processing vendors may increase our transaction fees or terminate their relationships with us. Any increases in
our credit and debit card fees could harm our results of operations, particularly if we elect not to raise our rates for our service to offset the increase. The termination of our ability to process payments on any major credit or debit card would
significantly impair our ability to operate our business.

We expect our results of operations to fluctuate on a quarterly and annual basis.

Our revenue and results of operations could vary significantly from quarter to quarter and year to year and may
fail to match our past performance because of a variety of factors, some of which are outside our control. Any of these events could cause the market price of our Class A common stock to fluctuate. Factors that may contribute to the variability of
our results of operations include:

the extent of our ability to increase our user traffic and engagement through product innovation and unpaid traffic-generating activities;

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our commitment to making decisions based on the best interests of consumers even if it means forgoing short-term revenue opportunities;

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the entrance of new competitors into our market;

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the timing and cost of expanding our sales organization and delays or inability with respect to achieving expected increased sales productivity;

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the ability to increase sales of our advertising products to new customers and expand sales of additional advertising products and services;

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fluctuations in the quantity of, and the price at which we are able to sell, our remnant advertising;

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the size and seasonal variability of our advertisers marketing budgets, which may impact, in particular, our display advertising revenues;

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the extent of our ability to effectively grow our business through paid advertising;

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the cost of investing in our technology infrastructure being greater than we anticipate;

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disruptions or outages in our website or mobile applications, and actual or perceived breaches of privacy;

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the extent to which existing advertisers renew their agreements with us and the timing and terms of those renewals; and

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changes in our pricing policies or those of our competitors.

Risks Related to Ownership of Our Class A Common Stock and this Offering

Our securities have no prior market and an active
trading market may not develop, which may cause our Class A common stock to trade at a discount from the initial public offering price.

Prior to this offering, there has been no public market for our Class A common stock. The initial public offering price for our Class A
common stock will be determined through negotiations between us and the representatives of the underwriters and may not be indicative of the market price of our Class A common stock after this offering. If you purchase shares of our Class A common
stock, you may not be able to resell those shares at or above the initial public offering price. We cannot predict the extent to which investor interest in us will lead to the development of an active trading market, or how liquid that market might
become. An active public market for our Class A common stock may not develop or be sustained after this offering. If an active public market does not develop or is not sustained, it may cause our Class A common stock to trade at a price lower than
the initial public offering price and it may be difficult for you to sell your shares of Class A common stock at a price that is attractive to you.

The dual class structure of our common stock as contained in our charter documents has the effect of concentrating voting control with our founders,
and may limit your ability to influence corporate matters.

Our Class B common stock has 10 votes per share, and our Class A common stock, which is the stock we are offering in this offering and the concurrent private placement, has one vote per share. All
shares of Class B common stock are held by our founders, Richard Barton and Lloyd Frink. Mr. Barton and Mr. Frink will control approximately % and
%, respectively, of the aggregate number of shares of our outstanding Class A common stock and Class B common stock, representing approximately %
and %, respectively, of the voting power of our outstanding capital stock following this offering and the concurrent private placement. Therefore, Mr. Barton and Mr. Frink will have
significant control over our management and affairs and over all matters requiring shareholder approval, including the election of directors and significant corporate transactions, such as a merger or other sale of us or our assets, for the
foreseeable future. Mr. Barton and Mr. Frink, as the

holders of Class B common stock, together will be able to control all matters submitted to our shareholders for approval. This concentrated control may limit the ability of holders of our
Class A common stock to influence corporate matters for the foreseeable future, and might harm the market price of our Class A common stock by delaying, deferring or preventing a change of control, impeding a merger, consolidation, takeover or other
business combination involving us, or discouraging a potential acquirer from acquiring our Class A common stock due to the limited voting power of such stock relative to the Class B common stock.

Our stock price may be volatile, and you may be unable to sell your
shares at or above the offering price.

The initial public offering price for the shares of our Class A common stock will be determined by negotiations between us and the
representatives of the underwriters and may not be indicative of prices that will prevail in the trading market. The market price of our Class A common stock could be subject to wide fluctuations in response to many of the risk factors discussed in
this prospectus, and others beyond our control, including:

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actual or anticipated fluctuations in our financial condition and results of operations;

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changes in projected operational and financial results;

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addition or loss of significant customers;

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actual or anticipated changes in our growth rate relative to that of our competitors;

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announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital-raising activities or
commitments;

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announcements of technological innovations or new offerings by us or our competitors;

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additions or departures of key personnel;

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changes in laws or regulations applicable to our services;

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fluctuations in the valuation of companies perceived by investors to be comparable to us;

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issuance of new or updated research or reports by securities analysts;

Furthermore, the stock markets in recent years have experienced extreme price and volume fluctuations that have affected and continue to
affect the market prices of the equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general
economic, political and market conditions such as recessions, interest rate changes or international currency fluctuations, may negatively impact the market price of our Class A common stock. If the market price of our Class A common stock after
this offering does not exceed the initial public offering price, you may not realize any return on your investment in us and may lose some or all of your investment. In the past, companies that have experienced volatility in the market price of
their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert managements attention from other
business concerns, which could harm our business, results of operations or financial condition.

Future sales of our Class A common stock in the public market could cause our stock price to decline.

Sales of a substantial number of shares
of our Class A common stock in the public market after this offering, or the perception that such sales might occur, could depress the market price of our Class A common stock and could impair our ability to raise capital through the sale of
additional equity securities. Upon completion of this offering and the concurrent private placement, based on our shares outstanding as of December 31, 2010, and after giving effect to the conversion of all outstanding shares of our convertible
preferred stock and Class C common stock into shares of Class A common stock, we will have shares of Class A common stock outstanding and 32,205,715
shares of Class B common stock outstanding, assuming no exercise of the underwriters over-allotment option to purchase additional shares and no exercise of outstanding options.

Of the outstanding shares, all of the shares of Class A common stock sold in this offering will be freely
tradable, except that any shares held or acquired by our affiliates, as that term is defined in Rule 144 under the Securities Act of 1933, as amended, or the Securities Act, will be subject to the volume limitations and certain
other restrictions of Rule 144. The shares to be sold in the concurrent private placement are subject to the holding period requirements of Rule 144 and are, therefore, subject to a minimum six-month holding requirement before such shares can
be sold in a non-registered transaction. The remaining shares of Class A common stock outstanding after this offering and the concurrent private placement (based on our shares
outstanding as of December 31, 2010) and the shares sold in the concurrent private placement will be restricted as a result of securities laws, lock-up agreements or other
contractual restrictions that restrict transfers for at least 180 days after the date of this prospectus, subject to certain extensions and subject to certain earlier releases if certain conditions are met. For further information, see
Shares Eligible for Future Sale. In addition, Citi may, in its sole discretion, release all or some portion of the shares subject to lock-up agreements prior to expiration of the lock-up period. After this offering and the concurrent
private placement, the holders of shares of Class A common stock and 32,205,715 shares of Class B common stock, or % of our
total outstanding Class A common stock (calculated on an as-if-converted basis), based on shares outstanding as of December 31, 2010, will be entitled to rights with respect to registration of these shares under the Securities Act pursuant to
an investors rights agreement. If the holders of our Class A common stock and Class B common stock entitled to registration rights elect to exercise such rights and sell a large number of shares, they could adversely affect the market price of
our Class A common stock. If we file a registration statement for the purposes of selling additional shares to raise capital and are required to include shares held by these holders pursuant to the exercise of their registration rights, our ability
to raise capital may be impaired. We intend to file a registration statement on Form S-8 under the Securities Act to register approximately million shares of our Class A
common stock for issuance under our Amended and Restated 2005 Equity Incentive Plan and 2011 Incentive Plan. Once we register these shares, they can be freely sold in the public market when the options underlying the shares are exercised and the
shares of Class A common stock are issued, subject to the lock-up period and other restrictions provided under the terms of the applicable plan, option agreements or lock-up agreements entered into with the option holders.

Because the initial public offering price of our Class A common
stock will be substantially higher than the pro forma net tangible book value per share of our outstanding Class A and Class B common stock following this offering, new investors will experience immediate and substantial dilution.

The initial public offering price per
share will be substantially higher than the pro forma net tangible book value per share of our Class A and Class B common stock immediately following this offering and the concurrent private placement based on the total value of our tangible
assets less our total liabilities. Therefore, if you purchase shares of our Class A common stock in this offering, you will experience immediate dilution of $ per
share, the difference between the price per share you pay for our Class A common stock and its pro forma net tangible book value per share as of December 31, 2010, after giving effect to the issuance of
shares of our Class A common stock in this offering and the concurrent private placement. Furthermore, investors purchasing shares of our
Class A common stock in this offering will only own approximately % of our outstanding shares of Class A and Class B common stock (and have
% of the combined voting power of the outstanding shares of our Class A and Class B common stock), after the offering even though their aggregate investment will represent
% of the total consideration received by us in connection with all initial sales of shares of our
capital stock outstanding as of December 31, 2010, after giving effect to the issuance of

shares of our Class A common stock in this offering and the concurrent private placement. To the extent outstanding options to purchase our Class A common stock are exercised, investors
purchasing our Class A common stock in this offering will experience further dilution.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our Class A common stock will depend
in part on the research and reports that securities or industry analysts publish about our company. We do not currently have and may never obtain research coverage by securities and industry analysts. If few or no securities or industry analysts
cover our company, the market price of our Class A common stock could be negatively impacted. If securities or industry analysts cover us and if one or more of such analysts downgrades our Class A common stock or publishes inaccurate or unfavorable
research about our business, our stock price would likely decline. If one or more of the analysts covering us fail to publish reports on us regularly, demand for our Class A common stock could decline, which could cause our stock price and trading
volume to decline.

The requirements of being a public
company may strain our resources and distract our management, which could make it difficult to manage our business.

Following the completion of this offering, we will be required to comply with various regulatory and reporting requirements, including
those required by the Securities and Exchange Commission, or the SEC. Complying with these reporting and other regulatory requirements will be time-consuming and will result in increased costs to us and could harm our business, results of operations
and financial condition.

As a public company, we
will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These requirements could strain our systems and resources. The Exchange Act requires that we file annual, quarterly and current
reports with respect to our business and financial condition. The Exchange Act requires that we maintain effective disclosure controls and procedures and internal control over financial reporting. To maintain and improve the effectiveness of our
disclosure controls and procedures and internal control over financial reporting, we will need to commit significant resources, hire additional staff and provide additional management oversight. We will be implementing additional procedures and
processes for the purpose of addressing the standards and requirements applicable to public companies. Sustaining our growth also will require us to commit additional management, operational and financial resources to identify new professionals to
join us and to maintain appropriate operational and financial systems to adequately support expansion. These activities may divert managements attention from other business concerns and could make it difficult to manage our business, which
could harm our business, results of operations, financial condition and cash flows. In addition, if we find any material weakness in our internal control, we could lose investor confidence in the accuracy and completeness of our financial reports,
which would cause the market price of our Class A common stock to decline.

Anti-takeover provisions in our charter documents and under Washington law could make an acquisition of us more difficult, limit attempts by our shareholders to replace or remove our current
management and limit the market price of our Class A common stock.

Provisions in our articles of incorporation and bylaws, as amended and restated in connection with this offering, may have the effect of delaying or preventing a change of control or changes in our
management. Our amended and restated articles of incorporation and amended and restated bylaws will include provisions that:



authorize our board of directors to issue, without further action by our shareholders, up to
shares of undesignated preferred stock;



establish that our board of directors will be divided into three classes, Class I, Class II and Class III, with each class serving
three-year staggered terms;

provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum;



provide that only our board of directors may change the size of our board of directors;



specify that special meetings of our shareholders can be called only by the chair of our board of directors, our president or our chief executive
officer;



establish an advance notice procedure for shareholder proposals to be brought before a meeting of shareholders, including proposed nominations of
persons for election to our board of directors;



require the approval of our board of directors or the holders of two-thirds of the voting power of our capital stock to amend our bylaws;



require the approval of two-thirds of the outstanding voting power of our capital stock to amend certain provisions of our articles of incorporation;
and



reflect two classes of voting common stock, as discussed above.

These provisions may frustrate or prevent any attempts by our
shareholders to replace or remove our current management by making it more difficult for shareholders to replace members of our board of directors, which is responsible for appointing our management. In addition, because we are
incorporated in the State of Washington, we are governed by the provisions of Chapter 23B.19 of the Washington Business Corporation Act, which prohibits certain business combinations between us and certain significant shareholders
unless specified conditions are met. These provisions may also have the effect of delaying or preventing a change of control of our company, even if this change of control would benefit our shareholders. See Description of Capital
Stock.

Our management will have broad discretion over
the use of the net proceeds we receive in this offering and the proceeds we receive in the concurrent private placement, and might not apply the proceeds in ways that increase the value of your investment.

Our management will have considerable discretion in applying
the net proceeds we receive in this offering and the proceeds we receive in the concurrent private placement. We currently intend to use these proceeds primarily for general corporate purposes, including working capital, sales and marketing
activities, general and administrative matters and capital expenditures. If appropriate opportunities arise, we may use a portion of these proceeds to acquire or invest in technologies, solutions or businesses that complement our business. We have
not allocated these proceeds for any specific purposes. Until these proceeds are used, we plan to invest them, and these investments may not yield a favorable rate of return. If we do not invest or apply these proceeds in ways that enhance
shareholder value, we may fail to achieve expected financial results, which could cause our stock price to decline.

This prospectus, including the sections
entitled Prospectus Summary, Risk Factors, Use of Proceeds, Managements Discussion and Analysis of Financial Condition and Results of Operations and Business, contains forward-looking
statements based on our managements beliefs and assumptions and on information currently available to our management. Forward-looking statements include all statements that are not historical facts and generally may be identified by terms such
as believe, may, will, estimate, continue, anticipate, intend, could, would, project, plan, expect or the
negative or plural of these words or similar expressions. These forward-looking statements may include, but are not limited to, statements concerning the following:

the viability of Internet and mobile media and the market for Internet and mobile advertising;



our ability to successfully manage any future acquisitions of business, solutions or technology; and



the attraction and retention of qualified employees and key personnel.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including
those described in Risk Factors. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the effect of
all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and
assumptions, the forward-looking events and circumstances discussed in this prospectus may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely on forward-looking statements as
predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in
the forward-looking statements will be achieved or occur. Moreover, except as required by law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements, and we undertake no obligation
to update publicly any forward-looking statements for any reason after the date of this prospectus to conform these statements to actual results or to changes in our expectations.

You should read this prospectus and the documents that we
reference in this prospectus and have filed with the SEC as exhibits to the registration statement of which this prospectus is a part with the understanding that our actual future results, levels of activity, performance and events and circumstances
may be materially different from what we expect.

Unless otherwise indicated, information contained in this
prospectus concerning our industry and the market in which we operate, including our general expectations and market position, market opportunity and market size, is based on information from various sources, on assumptions that we have made that
are based on those data and other similar sources and on our knowledge of the markets for our products and services. These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We
have not independently verified any third-party information and cannot assure you of its accuracy or completeness. While we believe the market-position, market-opportunity and market-size information included in this prospectus is generally
reliable, such information is inherently imprecise. In addition, projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate are necessarily subject to a high degree of uncertainty
and risk due to a variety of factors, including those described in Risk Factors and elsewhere in this prospectus. These and other factors could cause results to differ materially from those expressed in the estimates made by the
independent parties and by us.

We estimate that our net proceeds from the sale of the
Class A common stock in this offering and the proceeds from the concurrent private placement will be approximately $ million, assuming an initial public offering price of
$ per share, which is the midpoint of the range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated
expenses payable in connection with this offering. A $1.00 increase (decrease) in the assumed initial public offering price would increase (decrease) the net proceeds from this offering by
$ million, assuming the number of shares offered, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and
commissions and estimated expenses payable in connection with this offering.

The principal purposes of this offering and the concurrent private placement are to increase our financial flexibility, increase our visibility in the marketplace and, with respect to this offering,
create a public market for our Class A common stock. As of the date of this prospectus, we cannot specify with certainty all of the particular uses for these proceeds. However, we currently intend to use these proceeds primarily for general
corporate purposes, including working capital, sales and marketing activities, general and administrative matters and capital expenditures. We may also use a portion of these proceeds for the acquisition of, or investment in, technologies, solutions
or businesses that complement our business, although we have no present commitments or agreements to enter into any acquisitions or investments.

We have never declared or paid a cash dividend on our capital
stock and we intend to retain all available funds and any future earnings to fund the development and growth of our business. We therefore do not anticipate paying any cash dividends on our Class A common stock or Class B common stock in the
foreseeable future. Any future determinations to pay dividends on our Class A common stock or Class B common stock would depend on our results of operations, our financial condition and liquidity requirements, restrictions that may be imposed by
applicable law or our contracts, and any other factors that our board of directors may consider relevant. Pursuant to the current terms of our loan and security agreement with a financial institution, we cannot pay dividends unless specified
financial covenants are satisfied.

The following table sets forth our cash and cash equivalents
and short-term investments and capitalization as of December 31, 2010:



on an actual basis;



on a pro forma basis to give effect to the automatic conversion of all outstanding shares of our convertible preferred stock into an aggregate of
31,353,797 shares of our Class A common stock and the automatic conversion of all outstanding shares of our Class C common stock into an aggregate of 7,794,285 shares of our Class A common stock, both to be effected upon the effectiveness
of the registration statement of which this prospectus is a part; and



on a pro forma, as adjusted basis to give effect to the issuance and sale by us of
shares of our Class A common stock in this offering and the concurrent private placement, and our receipt of the net proceeds from the sale of such shares at an assumed
initial public offering price of $ per share, which is the midpoint of the range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts
and commissions and estimated expenses payable in connection with this offering.

The information below is illustrative only. Our capitalization following this offering and the concurrent private placement will depend on the actual initial public offering price and other terms of this
offering determined at pricing. You should read this table in conjunction with the sections entitled Selected Financial and Other Data and Managements Discussion and Analysis of Financial Condition and Results of
Operations and our financial statements and related notes included elsewhere in this prospectus.

A $1.00 increase (decrease) in the assumed initial public offering price of
$ per share would increase (decrease) the amount of cash and cash equivalents and short-term investments, additional paid in capital and total shareholders equity and total capitalization by
approximately $ million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting
discounts and commissions and estimated offering expenses payable in connection with this offering. Similarly, each increase (decrease) of one million shares in the number of shares of our Class A common stock offered by us would increase
(decrease) the amount of cash and cash equivalents and short-term investments, additional paid-in capital, total shareholders equity and total capitalization by approximately
$ million, assuming that the assumed initial public offering price remains the same and after deducting underwriting discounts and commissions and estimated expenses
payable in connection with this offering. The pro forma, as adjusted, information discussed above is illustrative only and will be adjusted based on the actual public offering price and other terms of this offering determined at pricing.

The number of shares in the table above excludes, as of
December 31, 2010:



shares of our Class A common stock reserved for future issuance under our
2011 Incentive Plan, which we plan to adopt in connection with this offering, as more fully described in Executive Compensation  Employee Benefit Plans;



16,935,951 shares of our Class A common stock issuable upon the exercise of options outstanding as of December 31, 2010, to purchase shares
of our Class A common stock at a weighted average exercise price of $1.19 per share;



3,695,642 shares of our Class A common stock issuable upon the exercise of outstanding options granted after December 31, 2010, to purchase
shares of our Class A common stock at a weighted average exercise price of $1.15 per share; and



700,000 shares of our Class A common stock issued in March 2011 in connection with a purchase of assets.

If you invest in our Class A common stock in this offering,
your ownership interest will be diluted immediately to the extent of the difference between the initial public offering price per share of our Class A common stock and the net tangible book value per share of our common stock after this offering and
the concurrent private placement.

Our pro forma
net tangible book value as of December 31, 2010, was $16.6 million or $0.22 per share of Class A common stock and Class B common stock. Pro forma net tangible book value per share represents the amount of total tangible assets (total assets
less intangible assets) less total liabilities, divided by the number of shares of Class A common stock and Class B common stock outstanding as of December 31, 2010, after giving effect to the automatic conversion of all outstanding shares of our
convertible preferred stock into an aggregate of 31,353,797 shares of our Class A common stock and the automatic conversion of all outstanding shares of our Class C common stock into an aggregate of 7,794,285 shares of our Class A common stock, both
to be effected upon the effectiveness of the registration statement of which this prospectus is a part.

After giving effect to
the issuance and sale by us of shares of our Class A common stock in this offering and the concurrent private placement at the assumed initial public offering price of
$ per share, which is the midpoint of the range set forth on the cover page of this prospectus, and after deducting the underwriting discounts and commissions and our estimated
offering expenses payable in connection with this offering, our pro forma, as adjusted, net tangible book value immediately after this offering and the concurrent private placement would have been
$ million, or $ per share. This amount represents an immediate increase in net tangible book value of
$ per share to our existing shareholders and an immediate dilution of $ per share to our new investors
and concurrent private placement investors purchasing shares of Class A common stock.

The following table illustrates this dilution on a per share basis:

Assumed initial public offering price

$

Pro forma net tangible book value per share as of December 31, 2010

$

0.22

Increase per share attributable to new investors and concurrent private placement investors

Pro forma, as adjusted, net tangible book value per share immediately after this offering and the concurrent private
placement

Dilution in pro forma, net tangible book value per share to new investors and concurrent private placement
investors

$

A $1.00 increase (decrease) in the assumed initial public offering price of per share would increase (decrease) our pro forma, as
adjusted, net tangible book value as of December 31, 2010 by approximately million, assuming the number of shares offered by us, as set forth on the cover page of this
prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated expenses payable in connection with this offering. A $1.00 increase (decrease) in the assumed initial public offering price per share
would also increase the pro forma, as adjusted, net tangible book value per share immediately after this offering and the concurrent private placement and the dilution in pro forma net tangible book value per share to new investors and concurrent
private placement investors by $ and $ , respectively, assuming the number of shares offered by us, as set
forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable in connection with this offering. As such, changes in the resulting pro forma,
as adjusted, net tangible book value per share after this offering and the concurrent private placement and dilution in, pro forma, as adjusted, net tangible book value per share to new investors and the concurrent private placement investors are
not directly proportional to changes in the assumed offering price per share.

The following table sets forth as of December 31, 2010, on a pro forma, as adjusted, basis
as described above, the differences between the number of Class A common stock purchased from us, the total consideration paid to us and the average price per share that existing shareholders, new investors and the concurrent private placement
investors paid. The table gives effect to the automatic conversion of all outstanding shares of our convertible preferred stock into shares of Class A common stock and the automatic conversion of all outstanding shares of our Class C common stock
into shares of our Class A common stock. The calculation below is based on an assumed initial public offering price of per share, which is the midpoint of the range set forth
on the cover page of this prospectus, and before deducting any underwriting discounts and commissions and estimated offering expenses payable in connection with this offering:

Total Shares

Total Consideration

Average PricePer
Share

Number

Percent

Amount

Percent

Existing shareholders

%

$

%

$

New investors

%

$

%

$

Concurrent private placement investors

%

$

%

$

Total

100

%

$

100

%

$

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share would increase (decrease) total
consideration paid by new investors purchasing shares in this offering and total consideration paid by all shareholders by $ million, assuming the number of shares offered by
us, as set forth on the cover page of this prospectus, remain the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable in connection with this offering.

If the underwriters exercise their over-allotment option in
full, the number of shares of Class A common stock held by the new investors purchasing shares in this offering will be increased to , or approximately
% of the total number of shares of our Class A common stock outstanding after this offering. However, funds affiliated with Technology Crossover Ventures, and PAR
Investment Partners, L.P., have agreed to purchase from us in a concurrent private placement the number of shares of Class A common stock with an aggregate purchase price of $5.0 million and $0.5 million, respectively, at the assumed initial public
offering price of $ per share, which is the midpoint of the range set forth on the cover page of this prospectus. If the underwriters exercise their over-allotment option in
full and the funds affiliated with Technology Crossover Ventures and PAR Investment Partners, L.P., purchase $5.0 million and $0.5 million of shares of Class A common stock, respectively, in the concurrent private placement, our existing
shareholders would own between % and %, in the aggregate, and new investors purchasing shares in this
offering would own between % and %, in the aggregate, of the total number of shares of our Class A
common stock outstanding after this offering and the concurrent private placement.

The tables and calculations above exclude, as of December 31, 2010:



shares of our Class A common stock reserved for future issuance under our
2011 Incentive Plan, which we plan to adopt in connection with this offering, as more fully described in Executive Compensation  Employee Benefit Plans;



16,935,951 shares of our Class A common stock issuable upon the exercise of options outstanding as of December 31, 2010, to purchase shares
of our Class A common stock at a weighted average exercise price of $1.19 per share;



3,695,642 shares of our Class A common stock issuable upon the exercise of outstanding options granted after December 31, 2010, to purchase
shares of our Class A common stock at a weighted average exercise price of $1.15 per share; and



700,000 shares of our Class A common stock issued in March 2011 in connection with a purchase of assets.

You should read the financial data set forth below in
conjunction with the information under Managements Discussion and Analysis of Financial Condition and Results of Operations and our financial statements and related notes included elsewhere in this prospectus. Our historical
results are not necessarily indicative of our results to be expected in any future period. We have derived the following statements of operations data for the years ended December 31, 2008, 2009 and 2010 and balance sheet data as of
December 31, 2009 and 2010 from our audited financial statements included elsewhere in this prospectus. We have derived the following statements of operations data for the years ended December 31, 2006 and 2007 and balance sheet data as of
December 31, 2006, 2007 and 2008 from our audited financial statements not included in this prospectus.

Year Ended December 31,

2006

2007

2008

2009

2010

(in thousands, except per share data)

Statement of Operations Data:

Revenues

$

4,289

$

7,106

$

10,593

$

17,491

$

30,467

Costs and expenses:

Cost of revenues(1)

1,621

3,710

4,198

4,042

4,973

Sales and marketing(1)

4,676

6,118

7,481

9,654

14,996

Technology and development(1)

6,794

12,885

15,048

11,260

10,651

General and administrative(1)

5,148

6,179

5,770

5,501

6,684

Total costs and expenses

18,239

28,892

32,497

30,457

37,304

Loss from operations

(13,950

)

(21,786

)

(21,904

)

(12,966

)

(6,837

)

Other income

1,361

1,496

687

111

63

Net loss

$

(12,589

)

$

(20,290

)

$

(21,217

)

$

(12,855

)

$

(6,774

)

Net loss per share attributable to common shareholders  basic and diluted

Pro forma net loss per share attributable to common shareholders has been calculated assuming the automatic conversion of all outstanding shares of our convertible
preferred stock into 31,353,797 shares of our Class A common stock and the automatic conversion of all outstanding shares of our Class C common stock into 7,794,285 shares of our Class A common stock, both to be effected upon the effectiveness of
the registration of which this prospectus is a part.

(3)

See Adjusted EBITDA below for more information and for a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure
calculated and presented in accordance with U.S. generally accepted accounting principles, or GAAP.

Year Ended December 31,

2006

2007

2008

2009

2010

(in thousands)

Balance Sheet Data:

Cash and cash equivalents and short-term investments

$

30,734

$

41,728

$

24,270

$

16,091

$

13,777

Property and equipment, net

9,236

9,253

6,249

4,409

4,929

Working capital

30,155

41,451

25,428

16,432

11,941

Total assets

42,905

54,406

34,482

24,608

24,013

Convertible preferred stock

3

4

4

4

4

Total shareholders equity

39,777

51,044

31,840

21,126

17,448

Adjusted EBITDA

To provide investors with additional information regarding our financial results, we have disclosed within this prospectus Adjusted EBITDA, a non-GAAP financial measure. We have provided a reconciliation
below of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure.

We have included Adjusted EBITDA in this prospectus because it is a key metric used by our management and board of directors to measure operating performance and trends and to prepare and approve our
annual budget. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis.

Our use of Adjusted EBITDA has limitations as an analytical
tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

Adjusted EBITDA does not consider the potentially dilutive impact of share-based compensation;



Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and
Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; and



Other companies, including companies in our own industry, may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a
comparative measure.

Because
of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net loss and our other GAAP results.

The following discussion and analysis of our financial
condition and results of operations should be read in conjunction with our audited financial statements and related notes to financial statements included elsewhere in this prospectus. In addition to historical financial information, the following
discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those contained in or implied by any forward-looking statements. Factors that could cause or contribute to
these differences include those discussed below and elsewhere in this prospectus, particularly in Risk Factors.

Overview

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U.S. homes  homes for sale, homes for rent and homes not currently on the market  attracts an active and vibrant community of users. Individuals and businesses that use Zillow have updated information on more than 27 million homes
and added more than 50 million home photos, creating exclusive home profiles available nowhere else. These profiles include rich detailed information about homes, including property facts, listing information and purchase and sale data. We
provide this information to our users where, when and how they want it, both through our website and through our industry-leading mobile applications that enable consumers to access our information when they are curbside, viewing homes. Using
industry-leading automated valuation models, we provide current home value estimates, or Zestimates, on more than 70 million U.S. homes, and current rental price estimates, or Rent Zestimates, on more than 100 million U.S. homes. Our
products and services present residential real estate data in novel ways that have revolutionized the way consumers search for, find and understand home-related information and make real estate decisions.

We were incorporated in December 2004 and have continually
introduced innovative products, achieving key product development and business milestones that have driven our revenue and traffic growth.



On February 8, 2006, we launched the initial version of our website, Zillow.com, providing Zestimates on approximately 40 million U.S. homes.
Two days later, we attracted our one millionth visitor.



In November 2007, we announced our listings feed program, allowing real estate brokerages to directly feed their listings to our website. By June 2008,
we were displaying 2.3 million for sale listings and have since grown our listings to provide extensive nationwide sale and rental listing information.



In April 2008, we launched Zillow Mortgage Marketplace. By February 2009, mortgage lenders had provided over one million marketplace loan quotes. We
began to charge mortgage lenders for participation in Zillow Mortgage Marketplace in January 2010.



In October 2008, we launched our Premier Agent program. By the end of 2010, we had more than 8,000 paying Premier Agent subscribers.



In April 2009, we released our first mobile application. We now operate the most popular mobile real estate applications across iPhone, iPad, Android
and BlackBerry.



In December 2009, we began displaying rental listings and enhanced this experience with the introduction of Rent Zestimates in March 2011.



In December 2010, we began collecting and displaying consumer-generated real estate agent ratings and reviews. By March 2011, consumers had submitted
more than 30,000 agent reviews.



In February 2011, we launched a strategic relationship with Yahoo! Real Estate through which we provide real estate listings to Yahoo! Real Estate and
have exclusive rights to sell subscription advertising and certain graphical advertisements for display throughout the Yahoo! Real Estate site.

We generate revenues from local real estate professionals, primarily on an individual
subscription basis, and from mortgage professionals and brand advertisers. Our revenues include marketplace revenues, consisting of subscriptions sold to real estate agents and advertising sold on a cost per click, or CPC, basis to mortgage lenders,
and display revenues consisting of advertising placements sold primarily on a cost per thousand impressions, or CPM, basis.

We have experienced significant revenue growth over the past three years. In 2008, 2009 and 2010 we focused on growing our marketplace
revenues, which accounted for the majority of our revenue growth over that period. This growth in marketplace revenues helped us achieve an overall 70% compound annual growth rate from 2008 to 2010. The increase in marketplace revenues resulted from
growth in our Premier Agent program and the commencement of charging mortgage lenders for participation in Zillow Mortgage Marketplace. Our Premier Agent program established a significant source of more predictable subscription-based revenue that
complements our display revenues, and created a diversified revenue mix.

In 2008, 2009 and 2010, we generated revenues of $10.6 million, $17.5 million and $30.5 million, respectively, representing growth of 49%, 65% and 74%, respectively. We believe achieving
these levels of revenue growth were primarily the result of significant growth in the following areas:



traffic to our website and mobile applications  indicated by the average number of monthly unique users for the three months ended
December 31, 2008, 2009 and 2010, of 5.5 million, 7.6 million and 12.7 million, respectively, representing year-over-year growth of 48%, 38% and 66%, respectively;



marketplace revenues  due to the launch of our Premier Agent program in 2008 and the commencement of charging mortgage lenders for participation
in Zillow Mortgage Marketplace in January 2010; and

To analyze our business performance, determine financial
forecasts and help develop long-term strategic plans, we frequently review the following key growth drivers:

Unique Users

Measuring unique users is important to us because our marketplace revenues depend in part on our ability to enable our users to connect
with real estate and mortgage professionals, and our display revenues depend in part on the number of impressions delivered. Furthermore, our community of users improves the quality of our living database of homes with their contributions. We define
a unique user as an individual who has visited our website or mobile applications at least once within a calendar month, as measured by our Omniture analytical tools.

The number of Premier Agent subscribers is an important
driver of revenue growth because each subscribing agent pays us a monthly fee to participate in the program. We define a Premier Agent subscriber as an agent with a paid subscription at the end of a period.

At December 31,

2008

2009

2010

2008 to 2009% Change

2009 to 2010% Change

Premier Agent Subscribers

26

2,764

8,102

*

193

%

*

Not a meaningful measurement because the Premier Agent program was launched in October 2008.

Basis of Presentation

Revenues

We generate revenues from local real estate professionals, primarily on an individual subscription basis, and from mortgage professionals
and brand advertisers. Our revenues include marketplace revenues and display revenues.

Marketplace Revenues. Marketplace revenues consist of subscriptions sold to real estate agents under our Premier Agent program and CPC advertising related to our
Zillow Mortgage Marketplace sold to mortgage lenders.

Our Premier Agent program allows local real estate agents to establish a persistent online and mobile presence on Zillow in the zip codes they serve. We present contact information for each Premier Agent
alongside home profiles and home listings within the agents zip code, assisting consumers in evaluating and selecting the real estate agent best suited for them. Pricing for our Premier Agent subscriptions varies by zip code. Subscription
advertising revenues are recognized on a straight-line basis during the contractual period over which the advertising is delivered. Typical terms of our Premier Agent subscription contracts range from six to 12 months. Growth in our
subscription advertising product is based on our ability to continue to attract agent subscribers and drive consumer traffic to those agents on our website and through our mobile applications.

In Zillow Mortgage Marketplace, participating qualified mortgage lenders make a prepayment to gain access to
consumers interested in connecting with mortgage professionals. Consumers who request rates for mortgage loans in Zillow Mortgage Marketplace are presented with personalized lender quotes from participating lenders. We only charge mortgage
lenders a fee when users click on their links for more information regarding a mortgage loan quote. Mortgage lenders who exhaust their initial prepayment can then prepay additional funds to continue to participate in the marketplace.

Display
Revenues. Display revenues primarily consist of graphical web and mobile advertising sold on a CPM basis to advertisers primarily in the real estate industry, including real estate brokerages, home builders, mortgage
lenders and home services providers. Our advertising customers also include telecommunications, automotive, insurance and consumer products companies. We recognize these revenues as impressions are delivered to users interacting with our website or
mobile applications. Growth in display revenues depends on continuing growth in traffic to our website and mobile applications and migration of advertising spend online from traditional broadcast and print media.

Cost of Revenues. Our cost of revenues consists of expenses related to
operating our website and mobile applications, including associated headcount expenses, such as salaries and benefits and share-based compensation and bonuses. Cost of revenues also includes credit card fees, ad serving costs paid to third parties,
revenue-sharing costs related to our commercial business relationships and facilities costs allocated on a headcount basis.

Sales and Marketing. Sales and marketing expenses consist of headcount expenses, including salaries,
commissions, benefits, share-based compensation expense and bonuses for sales, sales support, customer support, marketing and public relations employees. Sales and marketing expenses also include other sales expenses related to promotional and
marketing activities and facilities costs allocated on a headcount basis.

Technology and Development. Technology and development expenses consist of headcount expenses, including salaries and benefits, share-based compensation expense and
bonuses for salaried employees and contractors engaged in the design, development and testing of our website. Technology and development expenses also include equipment and maintenance costs and facilities costs allocated on a headcount basis.
Technology and development expenses also include amortization costs related to capitalized website and development activities and amortization of certain intangibles and licensing costs related to the purchase of data used to populate our website.

General and
Administrative. General and administrative expenses consist of headcount expenses, including salaries, benefits, share-based compensation expense and bonuses for executive, finance, accounting, legal, human resources,
recruiting and administrative support. General and administrative expenses also include legal, accounting and other third-party professional service fees, bad debt and facilities costs allocated on a headcount basis.

Other Income

Other income consists of interest income earned on our cash
and cash equivalents and short-term investments.

Income Taxes

We are subject to U.S. federal income taxes. As of December 31, 2010, we did not have taxable income and, therefore, no tax liability
or expense has been recorded in the financial statements. We have provided a full valuation allowance against our net deferred tax assets as of December 31, 2009 and 2010, because there is significant uncertainty around our ability to realize
the deferred tax assets in the future.

We adopted
the provisions related to the accounting for uncertainty in income taxes as of January 1, 2007, which provide a financial statement recognition and measurement threshold and measurement attribute for a tax position taken or expected to be taken
in a tax return. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows.

Marketplace revenues grew from
$3.9 million in 2009 to $13.2 million, and represented 43% of total revenues in 2010 compared to 22% of total revenues in 2009. This increase in marketplace revenues was primarily attributable to growth in the number of subscribers in our
Premier Agent program from 2,764 as of December 31, 2009 to 8,102 as of December 31, 2010, an increase of 193%. We believe this increase in subscribers in our Premier Agent program was driven by our continued focus on developing our
marketplace program and the sales team supporting it, and the overall growth in the number of unique users of our website and mobile applications. Marketplace revenues also increased because we began to charge mortgage lenders for participation in
Zillow Mortgage Marketplace in January 2010.

Display revenues increased from $13.6 million in 2009 to $17.2 million in 2010 and represented 57% of total revenues in 2010
compared to 78% of total revenues in 2009. We believe this growth was primarily the result of the increase in our unique users. The growth in unique users increased the number of graphical display impressions available for sale and advertiser demand
for graphical display inventory.

2008
Compared to 2009. Overall revenues increased by $6.9 million, or 65%, in 2009 compared to 2008. Marketplace revenues grew to $3.9 million and display revenues grew by 30% in 2009 compared to 2008.

Marketplace revenues grew from $0.1 million in 2008 to $3.9
million, and represented 22% of total revenues in 2009 compared to 1% of total revenues in 2008. The increase in marketplace revenues was due to the full-year impact of selling our Premier Agent program in 2009, as we commenced selling this product
in October 2008.

Display revenues grew from $10.5
million in 2008 to $13.6 million, and represented 78% of total revenues in 2009 compared to 99% of total revenues in 2008. The increase in display revenues was primarily the result of the increase in our unique users and the increased productivity
of our field sales team.

2009 Compared to 2010. Cost of revenues increased by $0.9 million, or 23%, in 2010 compared to 2009. The increase was the result of $0.5 million greater ad
serving, credit card fees and other costs and an increase of $0.3 million in headcount expenses for employees supporting the operation of our website. We expect that our cost of revenues will increase in future years as we continue to incur
more expenses that are associated with growth in revenues.

2008 Compared to 2009. Cost of revenues decreased by $0.2 million, or 4%, in 2009 compared to 2008. The decrease was driven by a decline in headcount expenses of
$0.4 million resulting from a headcount reduction in the fourth quarter of 2008, offset by an increase of $0.2 million in ad serving and credit card fees related to revenue growth.

Sales and Marketing

Year Ended December 31,

2008

2009

2010

2008 to 2009% Change

2009 to 2010% Change

(in thousands)

Sales and marketing

$

7,481

$

9,654

$

14,996

29

%

55

%

2009 Compared to 2010. Sales and marketing expenses increased by $5.3 million, or 55%, in 2010 compared to 2009. The increase is related to growth in headcount
expenses and related commissions of $5.1 million, primarily for our sales team to promote sales of our Premier Agent program, and tradeshows, conferences and related travel expenses. We expect our sales and marketing expenses will increase in
future years as we continue to invest more resources in growing our sales team and potentially invest in advertising. Although these expenses may increase as a percentage of revenues in the near term, we expect these expenses will decrease as a
percentage of revenues in the long term.

2008 Compared to 2009. Sales and marketing expenses increased by $2.2 million, or 29%, in 2009
from 2008. The increase was primarily related to growth in headcount expenses and related commissions of $3.2 million, primarily offset by a reduction in marketing and related consulting expenses of $0.9 million. The increase in headcount
expenses was primarily attributable to the impact of hiring a local sales team to sell and promote our Premier Agent program. The offsetting decreases in marketing and related consulting expenses were primarily attributable to spending reductions
implemented in the fourth quarter of 2008.

Technology and Development

Year Ended December 31,

2008

2009

2010

2008 to 2009% Change

2009 to 2010% Change

(in thousands)

Technology and development

$

15,048

$

11,260

$

10,651

(25

%)

(5

%)

2009 Compared to 2010. Technology and development expenses decreased by $0.6 million, or 5%, in 2010 compared to 2009. The decrease was the result of a reduction
of $1.2 million in depreciation and amortization expense as historical purchases of computer equipment reached the end of their depreciable lives and significant components of capitalized website development costs being fully amortized, offset
by a

$0.6 million increase in headcount expenses and consulting expenses. While we expect our technology and development expenses to increase over time as we continue to build new website and
mobile functionality, we expect these expenses will decrease as a percentage of revenue.

2008 Compared to 2009. Technology and development expenses decreased by $3.8 million, or 25%, in 2009 compared to 2008. Approximately $1.7 million of the
decrease was related to a reduction in depreciation and amortization expense due to historical purchases of computer equipment reaching the end of their depreciable lives and significant components of capitalized website development costs becoming
fully amortized. In addition, $1.3 million of the decrease was related to the full year impact of our headcount reduction in the fourth quarter of 2008. Various reductions in other spending categories, totaling $0.8 million, such as
software expenses, repairs and maintenance expenses and consulting service expenses also contributed to the overall decrease from the prior year in technology and development expenses.

General and Administrative

Year Ended December 31,

2008

2009

2010

2008 to 2009% Change

2009 to 2010% Change

(in thousands)

General and administrative

$

5,770

$

5,501

$

6,684

(5

%)

22

%

2009 Compared to 2010. General and administrative expenses increased by approximately $1.2 million, or 22%, in 2010 compared to 2009. The increase was primarily
driven by an increase in headcount expenses of approximately $1.0 million. Legal expenses also increased by $0.4 million in 2010 compared to 2009 due to an increase in litigation activity relating to lawsuits filed against us in 2010. We
expect general and administrative expenses to increase in the near term as we invest in headcount expenses and expenses associated with being a public company, but remain flat or decline as a percentage of revenues over the long term.

2008 Compared to
2009. General and administrative expenses decreased by approximately $0.3 million, or 5%, in 2009 compared to 2008. The decrease was largely a result of the headcount reduction in the fourth quarter of 2008 and to
other initiatives we implemented at that time to reduce spending. Headcount expenses decreased by approximately $0.2 million, consulting expenses decreased by $0.2 million and legal expenses decreased by $0.2 million in 2009 compared
to 2008. These decreases were partially offset by increases of $0.3 million in other expenses.

Other Income

Year Ended December 31,

2008

2009

2010

2008 to 2009% Change

2009 to 2010% Change

(in thousands)

Other income

$

687

$

111

$

63

(84

%)

(43

%)

2009 Compared to 2010. Other income decreased by 43% in 2010 compared to 2009, largely as a result of lower cash and cash equivalents and short-term investment
balances and lower yields on those assets. We expect other income to increase in the near term because our cash and cash equivalents and short-term investments are expected to increase as a result of the net proceeds from this offering and the
proceeds of the concurrent private placement.

2008 Compared to 2009. Other income decreased by approximately $0.6 million, or 84%, in 2009
compared to 2008, largely as a result of lower cash and cash equivalents and short-term investment balances and lower yields on those assets.

The following table sets forth our unaudited quarterly
statements of operations data for each of the quarters in the years ended December 31, 2009 and 2010. In the opinion of management, the data has been prepared on the same basis as the audited financial statements included in this prospectus,
and reflects all necessary adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of this data. The results of historical periods are not necessarily indicative of the results of operations of any future
period. You should read this data together with our financial statements and the related notes included elsewhere in this prospectus.

For the Three Months Ended

March 31,2009

June 30,2009

September 30,2009

December 31,2009

March 31,2010

June 30,2010

September 30,2010

December 31,2010

(in thousands, except per share data)

Statement of Operations Data:

Revenues

$

2,742

$

4,504

$

5,541

$

4,704

$

5,331

$

7,334

$

8,229

$

9,573

Costs and expenses:

Cost of revenues(1)

920

1,038

1,049

1,035

1,162

1,222

1,263

1,326

Sales and marketing(1)

1,909

2,380

2,679

2,686

3,117

3,748

4,060

4,071

Technology and development(1)

3,077

2,774

2,837

2,572

2,534

2,878

2,528

2,711

General and administrative(1)

1,301

1,419

1,416

1,365

1,341

1,483

1,902

1,958

Total costs and expenses

7,207

7,611

7,981

7,658

8,154

9,331

9,753

10,066

Loss from operations

(4,465

)

(3,107

)

(2,440

)

(2,954

)

(2,823

)

(1,997

)

(1,524

)

(493

)

Other income

36

38

15

22

17

25

14

7

Net loss

$

(4,429

)

$

(3,069

)

$

(2,425

)

$

(2,932

)

$

(2,806

)

$

(1,972

)

$

(1,510

)

$

(486

)

Net loss per share attributable to common shareholders  basic and diluted

$

(0.10

)

$

(0.07

)

$

(0.06

)

$

(0.07

)

$

(0.07

)

$

(0.05

)

$

(0.03

)

$

(0.01

)

Weighted average shares outstanding  basic and diluted

42,612

42,615

42,625

42,675

42,722

42,791

43,275

43,846

Other Financial Data:

Adjusted EBITDA(2)

$

(2,153

)

$

(989

)

$

(489

)

$

(1,277

)

$

(1,183

)

$

(202

)

$

246

$

1,279

For the Three Months Ended

March 31,2009

June 30,2009

September 30,2009

December 31,2009

March 31,2010

June 30,2010

September 30,2010

December 31,2010

(in thousands)

(1) Includes share-based compensation as follows:

Cost of revenue

$

46

$

46

$

47

$

44

$

54

$

53

$

61

$

42

Sales and marketing

98

109

102

99

104

111

117

113

Technology and development

107

102

105

80

95

106

102

86

General and administrative

166

170

169

161

159

159

188

165

Total

$

417

$

427

$

423

$

384

$

412

$

429

$

468

$

406

(2) See Adjusted EBITDA below for more information and for a reconciliation of
Adjusted EBITDA to net loss, the most directly comparable financial measure calculated and presented in accordance with U.S. generally accepted accounting principles, or GAAP.

The following tables present our revenues by type for the periods presented:

For the Three Months Ended

March 31,2009

June 30,2009

September 30,2009

December 31,2009

March 31,2010

June 30,2010

September 30,2010

December 31,2010

(in thousands)

Revenues:

Marketplace revenues

$

455

$

865

$

1,168

$

1,424

$

1,854

$

2,632

$

3,628

$

5,114

Display revenues

2,287

3,639

4,373

3,280

3,477

4,702

4,601

4,459

Total

$

2,742

$

4,504

$

5,541

$

4,704

$

5,331

$

7,334

$

8,229

$

9,573

For the Three Months Ended

March 31,2009

June 30,2009

September 30,2009

December 31,2009

March 31,2010

June 30,2010

September 30,2010

December 31,2010

Percentage of Revenues:

Marketplace revenues

17

%

19

%

21

%

30

%

35

%

36

%

44

%

53

%

Display revenues

83

81

79

70

65

64

56

47

Total

100

%

100

%

100

%

100

%

100

%

100

%

100

%

100

%

Revenues increased sequentially in all quarters presented with the exception of the fourth quarter of 2009 as display revenues were negatively impacted in that quarter by a decrease in monthly unique
users for the quarter. The strong increase in consumer adoption of our website and mobile applications in 2010 was reflected in the significant growth in unique users over the year, which contributed to substantial increases in marketplace revenues.
As a result, we experienced less seasonality in revenues, with no decrease in the fourth quarter of 2010, as we grew our marketplace products and services. We have experienced seasonality in our display revenues generally as a result of fluctuations
of traffic to our website and mobile devices. However, in the fourth quarter of 2009 and the first quarter of 2010 we experienced sequential declines in display revenues largely due to price decreases associated with changes relating to our display
remnant program.

Adjusted EBITDA

The following table sets forth a
reconciliation of Adjusted EBITDA to net loss for each of the quarters in the years ended December 31, 2009 and 2010. Please refer to Adjusted EBITDA in the section entitled Selected Financial and Other Data for more
information.

The following tables set forth our key growth drivers for each of the quarters in the years ended
December 31, 2009 and 2010.

Average for the Three Months Ended

March 31,2009

June 30,2009

September 30,2009

December 31,2009

March 31,2010

June 30,2010

September 30,2010

December 31,2010

(in thousands)

Unique Users

8,084

8,615

8,485

7,611

9,301

10,751

12,061

12,666

At the Period Ended

March 31,2009

June 30,2009

September 30,2009

December 31,2009

March 31,2010

June 30,2010

September 30,2010

December 31,2010

Premier Agent Subscribers

285

1,111

2,106

2,764

3,438

4,777

6,448

8,102

Liquidity and Capital Resources

We have funded our operations since inception primarily from the issuance of common and preferred stock, and in 2010 from cash generated from operations. Through 2007, we raised approximately
$81.0 million through various offerings of our convertible preferred stock and approximately $5.9 million from the sale of our common stock.

As of December 31, 2010, we had cash and cash equivalents and short-term investments of $13.8 million. Cash and cash equivalent
balances consist of operating cash on deposit with our financial institutions and money market funds. Short-term investments as of December 31, 2010 consisted of U.S. Treasury securities. Amounts on deposit with third-party financial
institutions exceed the applicable Federal Deposit Insurance Corporation and the Securities Investor Protection Corporation insurance limits, as applicable. We believe that cash from operations and cash and short-term investment balances will be
sufficient to meet our ongoing operating activities, working capital, capital expenditures and other capital requirements for at least the next 12 months.

During March 2011, we entered into a loan and security agreement with a financial institution to establish a line of credit of $4.0
million, secured by substantially all our assets other than our intellectual property, to be used for general business purposes. The line of credit contains financial and non-financial covenants. As of March 31, 2011, we were in compliance with all
covenants. The line of credit is available through March 2013. During March 2011, we executed a standby letter of credit of $1.5 million in connection with the lease of our new Seattle offices and reserved this amount against the line of credit,
which reduces the available line to $2.5 million. As of March 31, 2011, there were no other amounts outstanding under the line of credit.

Year Ended December 31,

2008

2009

2010

(in thousands)

Cash Flow Data:

Cash flows provided by (used in) operating activities

$

(13,010

)

$

(4,217

)

$

2,258

Cash flows provided by (used in) investing activities

(5,779

)

(14,494

)

4,631

Cash flows provided by financing activities

112

100

950

Cash Flows Provided By (Used In) Operating Activities

In 2010, net cash provided by operating activities was
$2.3 million. This was driven primarily by an increase in the deferred revenue balance of $2.5 million.

In 2009, net cash used in operating activities was $4.2 million. This was driven by a net loss of $12.9 million, adjusted by
depreciation and amortization expense and share-based compensation expense of $6.4 million and $1.7 million, respectively. Changes in operating assets and liabilities reduced cash used in operating activities by $0.8 million.

In 2008, net cash used in operating activities was $13.0 million. This was driven by a
net loss of $21.2 million, adjusted for depreciation and amortization expense and share-based compensation expense of $8.1 million and $1.5 million, respectively. Changes in operating assets and liabilities reduced cash used in
operating activities by $1.5 million, primarily impacted by a decrease in the accounts receivable balance by $1.1 million.

Cash Flows Provided By (Used In) Investing Activities

Our primary investing activities include the purchase and
maturity of short-term investments and the purchase of property and equipment and intangible assets. Intangible assets consist of housing data and related content acquisitions used to populate our website. We expect to continue to purchase property
and equipment and intangible assets to support the requirements of our business and to fund these purchases with existing cash and proceeds from this offering.

Cash Flows Provided By Financing Activities

Our financing activities have primarily resulted from the
exercise of employee non-qualified stock options. The proceeds from the issuance of Class A common stock from the exercise of stock options in 2010 was $1.0 million.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of
December 31, 2009 or 2010.

Contractual Obligations

We have various operating leases for office
space and equipment. Our current headquarters in Seattle, Washington is under an operating lease expiring in February 2013 and we have entered into an operating lease for our new headquarters in Seattle, Washington under which we will be obligated
to make payments beginning in December 2012 and expiring in November 2022. We also have purchase obligations for content related to our website. We do not have any debt or capital lease obligations. The following table provides a summary of our
operating lease obligations and purchase obligations as of December 31, 2010:

Payment Due By Period

Total

Less Than1 Year

1-3 Years

3-5 Years

More Than5 Years

(in thousands)

Operating lease obligations

$

3,761

$

1,629

$

2,026

$

106

$



Purchase obligations

3,897

1,395

1,332

1,040

130

Total

$

7,658

$

3,024

$

3,358

$

1,146

$

130

The contractual commitment amounts in the table above are associated with agreements that are enforceable and legally binding. Obligations under contracts that we can cancel without a significant penalty
are not included in the table above.

Critical Accounting
Policies and Estimates

Our financial
statements are prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities,
revenues, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our
actual results could differ from these estimates.

We believe that the assumptions and estimates associated with revenue recognition, the
allowance for doubtful accounts, website and software development costs, recoverability of intangible assets with definite lives and other long-lived assets and share-based compensation have the greatest potential impact on our financial statements.
Therefore, we consider these to be our critical accounting policies and estimates. For further information on all of our significant accounting policies, see Note 2 of the accompanying notes to our financial statements.

Revenue Recognition

Our revenue is primarily derived from advertising services.
In general, we recognize revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered to the customer, (iii) the fee is fixed or determinable, and (iv) collectability is
reasonably assured. We consider a signed agreement, a binding insertion order or other similar documentation reflecting the terms and conditions under which products will be provided to be persuasive evidence of an arrangement. Collectability is
assessed based on a number of factors, including payment history and the creditworthiness of a customer. If it is determined that collection is not reasonably assured, revenue is not recognized until collection becomes reasonably assured, which is
generally upon receipt of cash.

Our marketplace
revenues consist of subscriptions sold to real estate agents under our Premier Agent program, and CPC advertising related to our Zillow Mortgage Marketplace sold to mortgage lenders. Subscription advertising revenues are recognized on a
straight-line basis during the contractual period over which the advertising is delivered. Typical terms of our Premier Agent subscription contracts range from six to 12 months. For Zillow Mortgage Marketplace, we recognize revenue when a user
clicks on a mortgage advertisement or on a link to obtain additional information about a mortgage loan quote.

Display revenues primarily consist of graphical advertising sold on a CPM basis to advertisers. We recognize these revenues as impressions
are delivered to users interacting with our website or mobile applications.

Allowance for Doubtful Accounts

We review accounts receivable on a regular basis and estimate an amount of losses for uncollectible accounts based on our historical collections experience, age of the receivable, knowledge of the
customer and the condition of the general economy and industry as a whole.

Website and Software Development Costs

The costs incurred in the preliminary stages of website and software development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and
incremental and deemed by management to be significant, are capitalized in property and equipment and amortized on a straight-line basis over their estimated useful lives. Maintenance and enhancement costs (including those costs in the
post-implementation stages) are typically expensed as incurred, unless such costs relate to substantial upgrades and enhancements to the website (or software) that result in added functionality, in which case the costs are capitalized and amortized
on a straight-line basis over the estimated useful lives.

Capitalized development activities placed in service are amortized over the expected useful lives of those releases, currently estimated at one year. Estimated useful lives of website and software
development activities are reviewed frequently and adjusted as appropriate to reflect upcoming development activities that may include significant upgrades and/or enhancements to the existing functionality.

Recoverability of Intangible Assets with Definite Lives and Other Long-Lived Assets

We evaluate intangible assets and other
long-lived assets for impairment whenever events or circumstances indicate they may not be recoverable. Recoverability is measured by comparing the carrying amount of an asset group to future undiscounted net cash flows expected to be generated. We
group assets for purposes of such review at the lowest level for which identifiable cash flows of the asset group are largely independent of the cash flows of the other groups of assets and liabilities. If this comparison indicates impairment, the
amount of impairment to be recognized is calculated as the difference between the carrying value and the fair value of the asset group.

Share-Based Compensation

We measure compensation expense for all share-based awards at fair value on the date of grant and recognize compensation expense over the
service period for awards expected to vest. We use the Black-Scholes-Merton option-pricing model to determine the fair-value for awards and recognize compensation expense on a straight-line basis over the awards vesting periods. Management has
determined the Black-Scholes-Merton fair value of our stock option awards and related share-based compensation expense with the assistance of third-party valuations. Determining the fair value of share-based awards at the grant date requires
judgment. The determination of the grant date fair value of options using an option-pricing model is affected by our estimated Class A common stock fair value as well as assumptions regarding a number of other complex and subjective variables. If
any of the assumptions used in the Black-Scholes-Merton model changes significantly, share-based compensation for future awards may differ materially compared with the awards granted previously. In valuing our options, we make assumptions about
risk-free interest rates, dividend yields, volatility, and weighted-average expected lives, including estimated forfeiture rates, of the options.

Risk-free rate. Risk-free interest rates are derived from U.S. Treasury securities as of the option
grant date.

Expected dividend
yields. Expected dividend yields are based on our historical dividend payments, which have been zero to date.

Volatility. Absent a public market for our shares, we have historically estimated volatility of our
share price based on the published historical volatilities of industry peers in the online publishing market (primarily the financial and real estate services industries) representing the verticals in which we operate.

Expected term. We
estimate the weighted-average expected life of the options as the average of the vesting option schedule and the term of the award, since, due to the limited period of time share-based awards have been exercisable, we do not have sufficient
historical exercise data to provide a reasonable basis upon which to estimate the expected term. The term of the award is estimated using the simplified method as the awards granted are plain vanilla share options.

Forfeiture
rate. Forfeiture rates are estimated using historical actual forfeiture trends as well as our judgment of future forfeitures. These rates are evaluated at least annually and any change in compensation expense is
recognized in the period of the change. The estimation of stock awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a
cumulative adjustment in the period in which the estimates are revised. We consider many factors when estimating expected forfeitures, including the types of awards and employee class. Actual results, and future changes in estimates, may differ
substantially from managements current estimates.

The following table presents the weighted-average assumptions used to estimate the fair
value of options granted during the periods presented:

Year Ended December 31,

2008

2009

2010

Expected volatility

57%

55%

50%

Expected dividend yields







Average risk-free interest rate

1.91  3.14

%

1.70  2.19

%

1.23  2.16

%

Weighted-average expected life

4.58 years

4.58 years

4.58 years

Valuation of Class A Common Stock. The following table summarizes by grant date the number of shares
of our Class A common stock subject to stock options granted since January 1, 2010, and the associated per share exercise price. As discussed below, we have determined for each grant that the exercise price equaled the fair value per share of
our Class A common stock as of the date of the grant.

Grant Date

OptionsGranted

Exercise PricePer Share

Fair ValuePer
Share

2010

March 12

2,937,825

$

1.06

$

1.06

March 17

10,000

$

1.06

$

1.06

April 15

23,000

$

1.06

$

1.06

May 20

219,000

$

1.06

$

1.06

July 20

582,625

$

0.96

$

0.96

August 17

185,000

$

0.96

$

0.96

September 15

763,000

$

0.96

$

0.96

October 21

24,500

$

0.96

$

0.96

November 15

100,000

$

0.96

$

0.96

December 15

23,500

$

0.96

$

0.96

2011

March 1

3,695,642

$

1.15

$

1.15

Since July 2006, we have obtained valuation analyses prepared by a third-party valuation firm to assist us in determining the fair value
of our Class A common stock. The valuations used methodologies, approaches and assumptions consistent with the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as
Compensation, or the AICPA Practice Guide. In obtaining third-party valuations of our Class A common stock, our management provided the third-party valuation firm with projections for revenue and expenses on a cash basis, and information about
our prospects, our performance and economic and financial market conditions, which the valuation firm used, along with other information, to perform its valuation analysis. These valuations were reviewed by management and either the board of
directors or the compensation committee of our board of directors in conjunction with share-based compensation grants. In determining the fair value of our Class A common stock, the board of directors and the compensation committee of our board of
directors considered these valuation reports, and other qualitative and quantitative factors that they considered relevant, including:



key employee hirings and terminations;



the seasonality of our business;



general market conditions in the technology, media and real estate markets;



our operating performance and competitive position within the online real estate space;

The third-party valuation firm performed a top-down valuation
by applying the Income Approach (as discussed below) to calculate a business enterprise value from which the estimated fair value of our Class A common stock was derived. We prepared financial forecasts for revenue and expenses on a cash
basis for five calendar years, which the third-party valuation firm used in its discounted cash flow, or DCF, methodology to estimate our enterprise value using the Income Approach. The financial forecasts were based on a number of assumptions,
including assumptions regarding revenue growth rates and expenses, that took into account our past experience and future expectations.

Under the Income Approach using the DCF methodology, estimated future free cash flow returns are discounted to present value at an
appropriate rate of return for the investment, where the discount reflects the degree of risk associated with the future returns and returns available from alternative investments. Higher risk leads to a higher discount rate, which produces a lower
value for the investment. Under the Income Approach, discrete period cash flows were determined over several years, and estimated in a residual period. The analysis was based on a number of assumptions, including:



our expected sales growth, cost of revenues, operating expenses, depreciation expense, income taxes and capital expenditures for the current and future
years, which assumptions were based on managements estimates as of the effective date of the valuation; and



a discount rate, which was applied to the forecasted discrete period cash flows and the residual cash flows projected beyond the discrete period.

The valuation looked at
publicly held companies whose stocks are actively traded (the comparable public company methodology) to derive appropriate ratios and multiples for determining the free cash flows and residual value used in the DCF methodology. To develop an
appropriate discount rate to apply to our cash flows, the valuation looked at required venture capital rates for investments in companies at various stages of the business cycle.

After using the DCF methodology to arrive at a business
enterprise value, the valuation looked at similar companies involved in merger or acquisition transactions and used the comparable public company methodology to benchmark our enterprise value as a multiple of projected revenues and EBITDA. The
valuation then added our cash balance to the enterprise value to arrive at the fair value of invested capital, or the value available to all investors of a company, including equity capital (common and preferred), before consideration of any
non-operating assets or liabilities. After arriving at the fair value for our total invested capital, the total value of equity is allocated over several series of convertible preferred stock, several classes of common stock and stock options to
purchase Class A common stock. Consistent with the AICPA Practice Guide, the value of each share of convertible preferred stock and each share of common stock can be inferred by analyzing various option-pricing methodologies.

The option method models the fair value of the various
securities comprising a companys capital structure as a series of call options on the proceeds expected from the sale of the company or the liquidation of its assets at some future date. The model estimates the fair value of each class of
securities as a function of the current estimated fair value of the company and assumptions based on the rights and preferences of the respective class. Under the option-pricing methodology used by the third-party valuation firm, the enterprise
value was allocated to the convertible preferred stock, several classes of common stock and stock options to purchase Class A common stock using a version of the Black-Scholes-Merton option valuation methodology. To determine the
Black-Scholes-Merton assumptions, the time to a liquidity event is estimated, the risk-free rate is determined

(typically based on the rate available on a government security whose term matches the assumed time to liquidity) and the volatility assumption is determined. For a private company, volatility is
based on the historical stock performance for comparable public companies and consideration of the relative lifecycle stage of the company.

March 12, March 17, April 15 and May 20, 2010

The stock options granted on these dates have an exercise price of $1.06 per share. Our board of directors
(with respect to the March 17 grants) and the compensation committee of our board of directors (with respect to the March 12 grants) determined this price taking into account the third-party valuation of our Class A common stock
performed as of March 1, 2010, which estimated that the fair value of our Class A common stock at that time was $1.06 per share. In the March 2010 valuation, under the Income Approach, a discount rate of 25% was applied. After arriving at
a business enterprise value, our cash balance was added to arrive at the fair value of total invested capital. A portion of the fair value for our total invested capital was then allocated to our Class A common stock under the option-valuation
methodology, assuming the following inputs: risk free rate of approximately 0.8%; volatility of approximately 65%; and time to expiration of approximately two years. Finally, the valuation applied a marketability discount of 30% to account for
the lack of liquidity relative to a public market.

For purposes of the April 15 and May 20 stock option grants, the compensation committee determined that there had been no significant
change in our business or industry that would warrant a different valuation than the fair value of our Class A common stock determined in March 2010, and continued to grant stock options with an exercise price equal to the fair value as
reflected in the March 1, 2010 valuation.

July 20, August 17, September 15, October 21, November 15 and December 15, 2010

The stock options granted on these dates
have an exercise price of $0.96 per share. The compensation committee of our board of directors determined this price taking into account the third-party valuation of our Class A common stock performed as of June 30, 2010, which estimated
that the fair value of our Class A common stock at that time was $0.96 per share. The decrease in the fair value of our Class A common stock from March 1, 2010, was primarily due to the fact that, in 2010, despite growth in revenues,
for the period April 1, 2010 through June 30, 2010, the Dow Jones Industrial Average declined 11% and significant macroeconomic pressures on the financial sector and housing markets, including the European debt crisis, continued to put at
risk the predictability of future cash flows of the business. As a result, the business enterprise value of our company at June 30, 2010 was determined to be lower than the enterprise value of Zillow at March 1, 2010. In the June 2010
valuation, under the Income Approach, a discount rate of 25% was applied. After arriving at a business enterprise value, our cash balance was added to arrive at the fair value of total invested capital. A portion of the fair value for our total
invested capital was then allocated to our Class A common stock under the option-valuation methodology, assuming the following inputs: risk free rate of approximately 0.54%; volatility of approximately 65%; and time to expiration of
approximately 1.75 years. Finally, the valuation applied a marketability discount of 25%, to account for the lack of liquidity relative to a public market.

For purposes of the stock option grants in August through December 2010, the compensation committee of our board of directors determined
that there had been no significant change in our business or prospects that would warrant a different valuation than the fair value of our Class A common stock determined in June 2010, and continued to grant stock options with an exercise price
equal to the fair value as reflected in the June 30, 2010 valuation. While our revenues increased over that period, we continued to operate at a net loss, as we faced a challenging housing market and a slowly recovering economy.

March 1, 2011

The stock options granted on this date have an exercise
price of $1.15 per share. The compensation committee of our board of directors determined this price taking into account the third-party valuation of our

Class A common stock performed as of December 31, 2010, which estimated that the fair value of our Class A common stock at that time was $1.15 per share. The increase over the June
2010 valuation was in part due to the positive impact on our projections of various initiatives that we had undertaken in 2010 to drive more traffic to our site and enhance our sales and marketing capabilities, offset in part by continued distress
in the housing market, constrained mortgage lending markets and historically high rates of foreclosures. In the third-party valuation firms December 31, 2010 valuation, two alternative scenarios were considered: (a) our continued
operation as a private company with a potential merger or acquisition of Zillow during the 2.5 years following the valuation date (the delayed event scenario); and (b) a potential initial public offering, or IPO, during 2011 (the IPO
scenario). In the December 2010 valuation, under the Income Approach, a discount rate of 25% was applied. After arriving at a business enterprise value, our cash balance was added to arrive at the fair value of invested capital. The fair value of
invested capital was then allocated to our common stock under each liquidation scenario. Under the IPO scenario, the fair value per share of Class A common stock was estimated by dividing the total equity value by the number of common
equivalent shares outstanding. Under the delayed event scenario, the fair value per share of Class A common stock was determined using the version of the Black-Scholes-Merton option-valuation methodology used in previous valuations, and the
following inputs were assumed: risk free rate of approximately 0.82%; volatility of approximately 55%; and time to expiration of approximately 2.5 years. The valuation applied a marketability discount of 15% to the fair value determined under
the IPO scenario and a marketability discount of 30% to the fair value determined under the delayed event scenario, to account for the lack of liquidity relative to a public market. The weighting of the common equity value per share assumed a
delayed event at 75% and the common equity value per share based on an IPO at 25%, in reaching the final fair value of $1.15 per share.

Recent Accounting Pronouncements

In October 2009, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2009-13 regarding ASC
Subtopic 605-25, Revenue Recognition  Multiple-element Arrangements. This ASU addresses criteria for separating the consideration in multiple-element arrangements. ASU 2009-13 will require companies to allocate the overall
consideration to each deliverable by using a best estimate of the selling price, or BESP, of individual deliverables in the arrangement in the absence of vendor-specific objective evidence, or VSOE, or other third-party evidence, or TPE, of the
selling price. The changes under ASU 2009-13 will be effective prospectively for revenue arrangements entered into or materially modified subsequent to adoption. We adopted the changes under ASU 2009-13 effective January 1, 2011.
Management does not believe that the adoption of this guidance will have any impact on our financial position, results of operations, cash flows or disclosures based on the types of revenue arrangements we have historically entered into and
currently have in place.

Effective
October 31, 2009, we adopted the FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles. This standard establishes only two levels of GAAP, authoritative and non-authoritative. The FASB Accounting
Standards Codification, or the Codification, became the source of authoritative, non-governmental GAAP, except for rules and interpretive releases of the SEC, which are sources of authoritative GAAP for SEC registrants. All other non-grandfathered,
non-SEC accounting literature not included in the Codification became non-authoritative. As the Codification was not intended to change or alter existing GAAP, it did not have any impact on our financial statements.

Effective January 1, 2010, we adopted new authoritative
guidance on fair value measurements and disclosures. The new guidance requires additional disclosures regarding fair value measurements, amends disclosures about postretirement benefit plan assets, and provides clarification regarding the level of
disaggregation of fair value disclosures by investment class. This guidance is effective for interim and annual reporting periods beginning after December 15, 2009, except for certain Level 3 activity disclosure requirements that will be
effective for reporting periods beginning after December 15, 2010. Accordingly, we adopted this new guidance beginning January 1, 2010, except for the additional Level 3 requirements, which will be adopted in 2011. Level 3 assets and
liabilities are those whose fair value inputs are unobservable and reflect managements best estimate of what market participants would use in pricing the asset or liability at the measurement date. The

adoption of this guidance did not and is not expected to have a material impact on our financial statements, as we do not have any Level 3 assets or liabilities.

Quantitative and Qualitative Disclosure About Market Risk

We are exposed to market risks in the ordinary course of our
business. These risks primarily consist of fluctuations in interest rates.

Interest Rate Risk

We do not have any long-term borrowings as of December 31, 2010.

Under our current investment policy, we invest our excess cash in money market funds, FDIC-insured certificates of deposits and U.S.
Treasury securities. Our current investment policy seeks first to preserve principal, second to provide liquidity for our operating and capital needs and third to maximize yield without putting our principal at risk.

Our investments are exposed to market risk due to the
fluctuation of prevailing interest rates that may reduce the yield on our investments or their fair value. As our investment portfolio is short-term in nature, we do not believe an immediate 10% increase in interest rates would have a material
effect on the fair market value of our portfolio, and therefore we do not expect our results of operations or cash flows to be materially affected to any degree by a sudden change in market interest rates.

Inflation Risk

We do not believe that inflation has had a material effect
on our business, results of operations or financial condition. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so
could harm our business, results of operations and financial condition.

Our mission is to build the most trusted and vibrant home-related marketplace

to empower consumers with information and tools to make intelligent decisions about homes.

Overview

Zillow is the leading real estate information marketplace. We provide vital information about homes, real
estate listings and mortgages through our website and mobile applications, enabling homeowners, buyers, sellers and renters to connect with real estate and mortgage professionals best suited to meet their needs. We are transforming the way people
make home-related decisions. Zillow provides consumers and real estate professionals an edge in real estate.

We maintain an unwavering commitment to giving consumers free access to as much useful information as possible. Our living database of
more than 100 million U.S. homes  including homes for sale, homes for rent and homes not currently on the market  attracts an active and vibrant community of users. Individuals and businesses that use Zillow have updated information
on more than 27 million homes and added more than 50 million home photos, creating exclusive home profiles available nowhere else. These profiles include rich detailed information about homes such as property facts, listing information and
purchase and sale data. We provide this information to our users where, when and how they want it, both through our website and through our industry-leading mobile applications that allow consumers to access our information when they are curbside,
viewing homes.

Homes are the center of
peoples lives, the focus of some of their most important decisions and often their most valuable assets. In addition to whether to buy, sell or rent, consumers make many other important home-related decisions throughout their lifetimes,
including decisions relating to refinancing or home equity loans, home maintenance and home improvement. Residential real estate is one of the largest sectors of the U.S. economy, and supports a large number of professionals that provide
home-related services.

Using complex, proprietary
automated valuation models, we provide current home value estimates, or Zestimates, on more than 70 million U.S. homes, and current rental price estimates, or Rent Zestimates, on more than 100 million U.S. homes. We present residential
real estate data in novel ways that have revolutionized the way consumers search for, find and understand home-related information and make real estate decisions. Consumers increasingly are turning to the Internet and mobile devices for real
estate information. During March 2011, 19.4 million unique users visited our website and mobile applications, representing year-over-year growth of over 90%.

Real estate and mortgage professionals are a critical part of the home-related marketplace. We enable consumers to connect with real
estate and mortgage professionals best suited to meet their needs. We have created a trusted and transparent marketplace where consumers can search and read reviews on local real estate and mortgage professionals and contact those professionals on
their own terms. Consumers initiate contact through our marketplace when they are ready to speak with real estate and mortgage professionals  providing those professionals with access to highly qualified clients and providing consumers with
control over their decision-making process.

We
generate revenues from local real estate professionals, primarily on an individual subscription basis, and from mortgage professionals and brand advertisers. Our revenues have grown significantly since our launch in 2006. For the year ended
December 31, 2010, we generated revenues of $30.5 million, as compared to $17.5 million in the year ended December 31, 2009, representing an increase of 74%.

Homes are the center of peoples lives, the focus of
some of their most important decisions and often their most valuable assets. Deciding where to live, which home to choose and whether and when to rent or buy are among the most important decisions a person must make. Historically, objective
information and advice about the value of homes has been hard to find and keep current, even though a homes changing value can profoundly influence many financial and personal decisions. In addition to whether to buy, sell or rent, consumers
make many other important home-related decisions throughout their lifetimes, including decisions relating to refinancing or home equity loans, home maintenance and home improvement.

Large Market Opportunities

Residential real estate is one of the largest sectors of the
U.S. economy and supports a large number of professionals that provide the following home-related services;

Purchase and Sale. Sales of existing and new homes in the United States in 2010 had an aggregate
transaction value of approximately $1.2 trillion, according to data from the U.S. Census Bureau and NAR. Residential real estate brokerage commissions and fees were approximately $60 billion in 2010, as derived by Zillow using data from
the U.S. Census Bureau, NAR and REAL Trends. There are more than 1.8 million licensed real estate agents in the United States, according to data published in April 2011 by the Association of Real Estate License Law Officials. In an effort to acquire
new client relationships and sell homes, real estate agents and brokers spent an estimated $8.6 billion on advertising in 2010, according to Borrell Associates.

Rental. The overall size
of the U.S. rental housing market, including rent, utilities and insurance, exceeds $300 billion annually, based on data from the U.S. Census Bureau and our own estimates.

Home Financing. In 2009
in the United States, 4.6 million purchase loans were originated, representing more than $852 billion in borrowings, and 8.1 million refinancing and home equity loans were originated, representing more than $1.7 trillion in
borrowings, according to the Federal Financial Institutions Examination Council. These loans generated approximately $26 billion in fees for mortgage lenders and brokers, according to data from the Federal Financial Institutions Examination
Council, the Mortgage Bankers Association and our own analysis. There were approximately 266,000 mortgage lenders and brokers in the U.S. in 2009, according to the U.S. Bureau of Labor Statistics.

Home Maintenance and
Improvement. Approximately $286 billion was spent on home improvement and repair by U.S. consumers in 2009 and more than 650,000 businesses earned the majority of their revenue by providing remodeling services,
according to the Harvard Joint Center for Housing Studies.

Highly Fragmented, Local and Complex Market

The market for residential real estate transactions and home-related services is highly fragmented, local and complex. Each home has
unique characteristics, including location, value, size, style, age and condition. Each consumer approaches home-related transactions with a personal set of objectives, priorities and values. Real estate agents generally operate in local markets as
independent contractors with different experience and skills. These conditions create challenges for consumers and real estate and mortgage professionals alike. Consumers are challenged to find information about homes, and to find real estate and
mortgage professionals who fit their individual needs. Real estate and mortgage professionals are challenged to efficiently advertise their services and identify new clients, and to measure the effectiveness of their marketing efforts.

Historically, consumers had minimal access to comprehensive
and objective residential real estate data, even though many home-related decisions are extraordinarily information-intensive. While real estate and mortgage professionals had some data, consumers did not have free, independent and easy access to
it. Even when accessible, the data was difficult to interpret and analyze.

Increasing Role of the Internet and Mobile Technologies

Consumers are increasingly turning to the Internet and mobile devices for real estate information. In 2010, 89% of
buyers used the Internet to search for homes and 38% of buyers found through the Internet the actual home they purchased, according to the 2010 National Association of REALTORS® Profile of Home Buyers and Sellers. With the widespread adoption of mobile and location-based technologies, consumers increasingly expect home-related information to
be available on their mobile devices where, when and how they want it.

Challenges for the Consumer

Consumers thinking about homes face many important questions:



What is the value of my home or a home I am interested in?



How does the value of one home compare to the value of other homes?



How do I shop for and find the right home for my family?



How can I get meaningful information about homes for sale when I am on location in a neighborhood?



Who are the best local real estate professionals to help me?



Should I buy, sell, refinance or remodel?



How do I find the best mortgage loan for me?



What is a fair rental price for this home?



Which neighborhood is right for my family?

Historically, finding answers to these and other important questions was challenging for many reasons:



Lack of a consumer-oriented experience. Consumers had difficulty getting and analyzing critical home-related data, such
as the current values of homes in a neighborhood, transaction prices for nearby homes, price reductions on homes for sale, appropriate rental rates and other housing information. The information that was available was designed for use in connection
with a purchase or sale transaction, but was not useful for consumers other home-related decisions and did not address many questions important to those decisions.



Information asymmetry. The majority of industry information sources were available to real estate and mortgage
professionals, not consumers.



Fragmented data. Consumers who wished to research neighborhoods, homes, real estate agents and mortgages needed a wide
variety of information from disparate sources. As a result, the information was not easily comparable, and was difficult to use for making intelligent home-related decisions.



Difficulty finding and evaluating local real estate and mortgage professionals. Consumers faced difficulties connecting
with highly rated real estate and mortgage professionals who were knowledgeable about the local market, well-respected and responsive, because there was no transparent source of information about local real estate and mortgage professionals.

Limited information curbside. Information about nearby listings, neighborhoods and comparable home values is generally
most useful to the consumer on location and historically had been hard to obtain when curbside, viewing homes.

Challenges for Real Estate and Mortgage Professionals

The fragmented nature of the residential real estate market has made it difficult for real estate and mortgage professionals, including
real estate brokers and agents and mortgage lenders, to market their services effectively. Real estate and mortgage professionals operating in this environment are challenged to build their reputations in crowded local markets, reach potential
clients at the right time, distinguish themselves from other real estate and mortgage professionals and cost-effectively promote their qualifications, real estate listings or mortgage loan rates.

The Zillow Edge

We are transforming the way consumers make home-related
decisions and connect with real estate and mortgage professionals. We maintain an unwavering commitment to giving consumers free access to as much useful information as possible and to providing transparency for all market participants. Our living
database of homes, Zestimates and Rent Zestimates form the foundation of our products and services.

Living Database of Homes

Our dynamic and comprehensive living database includes detailed information on more than 100 million U.S. homes, or most U.S. homes, and includes homes for sale, for rent and recently sold, as well
as properties not currently on the market. This database is central to the value we provide to consumers and real estate and mortgage professionals. It contains extensive information that users can search, through an easy-to-use interface, to
identify, analyze and compare homes. Our database is relevant to a broad range of users, including buyers, sellers, renters, homeowners, real estate agents and other real estate professionals. It includes information such as:



Property facts: Zestimate and its corresponding value range, number of bedrooms, number of bathrooms, square footage, lot
size, assessed tax value and property type such as single-family, condominium, apartment, multifamily, manufactured home or land.



Listing information: price, price history and reductions, dollars per square foot, days on the market, listing type (such
as for sale by agent, for sale by owner, foreclosures, new construction, rentals and Make Me Move homes) open houses, property photos and estimated monthly payment.

We synthesize data from hundreds of automated feeds,
representing information from tens of thousands of public and private sources. Applying extensive computer analytics to the data, we transform it into information that is accessible, understandable and useful.

We refer to the database as living because the
information is continually updated by the combination of our proprietary algorithms, synthesis of third-party data from hundreds of sources, and through improvements by us and, importantly, by our community of users. User-generated content from
owners, agents and others enriches our database with photos and additional property information. For example, individuals and businesses that use Zillow have updated information on more than 27 million homes in our database and added more than
50 million home photos, creating exclusive home profiles available nowhere else.

We have developed industry-leading automated home valuation
models that use advanced statistical methods and complex, proprietary algorithms. We use these models to provide current home value estimates, or Zestimates, on more than 70 million U.S. homes, and current rental price estimates, or Rent
Zestimates, on more than 100 million U.S. homes. In addition, based on our Zestimates, we produce Zillow Home Value Indexes at the neighborhood, zip code, city, metropolitan statistical area, county and national levels. Our Zillow Home Value
Indexes have been cited by government entities such as the Federal Reserve Bank and the Congressional Oversight Panel, university studies and respected national publications. For historical comparisons, we provide up to 15 years of Zestimate
history on each home and valuable information about property and real estate market trends. Our Zestimates, Rent Zestimates and Zillow Home Value Indexes allow consumers to evaluate homes and neighborhoods, and to easily evaluate historical trends,
as they contemplate critical home-related decisions.

Our living database, Zestimates and Rent Zestimates have enabled us to create innovative products and services that empower consumers, including:



Transformative Presentations and Tools. Our products and services present residential real estate data in novel ways that
have revolutionized the way consumers search for, find and understand home-related information, and make real estate decisions. Our map-based user interface allows users to search, navigate and zoom to areas of interest and find and compare
information quickly and efficiently from a variety of different perspectives across homes, neighborhoods, cities, counties and other geographical regions. Graphical presentations of historical trends complement the map display, enabling consumers to
gain valuable insights.



Community-Generated Content. Our large and engaged user community, both consumer and professional, contributes relevant,
unique content every day, complementing our living database with reviews of real estate and mortgage professionals and contributions to our real estate advice forums. As of March 31, 2011, our users had submitted more than 30,000 reviews of
local real estate agents, more than 8,600 reviews of mortgage professionals, and more than 370,000 questions and answers in our discussion forum, Zillow Advice. Zillow Advice allows consumers to ask questions of real estate and mortgage
professionals and other consumers and quickly learn more about homes and real estate topics of interest. In particular, many of our dedicated active contributors devote substantial time sharing their expertise about Zillow and the real estate market
on Zillow Advice. Real estate and mortgage professionals who participate in Zillow Advice play a key role in helping to educate consumers, and benefit from exposure to consumers and resulting referrals.



Trusted, Transparent Marketplace. We have created a trusted and transparent marketplace where consumers can identify and
connect with real estate and mortgage professionals that are best suited to meet their needs. Consumers initiate contact in our marketplace when they are ready to speak with real estate and mortgage professionals  providing those professionals
with access to highly qualified clients and providing consumers with control over their decision-making process. As more consumers visit Zillow, more real estate and mortgage professionals are attracted, resulting in more successful matches between
real estate and mortgage professionals and consumers, which in turn attracts even more professionals and consumers to Zillow.



Real Estate Agents. We present consumers with ratings and contact information for the listing agent and local
buyers agents alongside home profiles and listings to assist consumers in evaluating and selecting the real estate agent best suited for them. Our directory of local professional real estate agents augments this offering by providing detailed
information about real estate professionals, including more detailed ratings and reviews.



Mortgage Lenders. In Zillow Mortgage Marketplace, consumers can request free, personalized quotes based on their
submission of anonymous data, such as specific loan amount, zip code, purchase price or estimated home value, and credit score. In March 2011, consumers using Zillow

Mortgage Marketplace received an average of 25 personalized mortgage loan quotes per mortgage loan request. User-generated ratings and reviews of lenders are provided as a powerful tool to help
consumers shop for a lender. Consumers then decide if and when to contact mortgage professionals.



Curbside Access. Shopping for a home is a far more meaningful consumer experience when it occurs curbside 
untethered and on location. Through our mobile applications and mobile Web site, a consumer standing curbside at a home for sale can learn about the homes price, Zestimate, Rent Zestimate, number of bedrooms, square footage and past sales, and
also learn similar information about surrounding homes in the neighborhood. Within our mobile applications and while still curbside, the home shopper can find and click to call a local real estate agent to get more information on a home or schedule
a showing. With this scenario in mind, we have developed and operate the most popular platform of mobile real estate applications across iPhone, iPad, Android and BlackBerry.

Competitive Advantages

We believe we have the following competitive advantages:



Inimitable Database. Our living database of homes is the result of years of substantial investment, sophisticated
economic and statistical analysis, complex data aggregation and millions of user contributions. This unparalleled resource enables us to create content, products and services not available elsewhere, and attracts an active, vibrant community of
users. We benefit from network effects. As more consumers come to our website to use our products and services, more real estate and mortgage professionals contribute content to distinguish themselves, thereby making our marketplace more useful and
attracting additional consumers.



Independent Market Position and Consumer Focus. Zillow has been built independently of any real estate industry group. We
maintain an unwavering commitment to giving consumers free access to as much useful information as possible. We provide unbiased information, products and services, empowering consumers to make informed decisions about homes and the residential real
estate market. We believe our independence enables us to create compelling products and services with broad consumer appeal.



Powerful Brand and Scale. We have established a powerful brand identity and built a large user community in a short time.
More than two-thirds of our traffic is direct, with demonstrated consumer intent to visit the Zillow brand. During March 2011, 19.4 million unique users visited our website and mobile applications, representing year-over-year growth of over 90%,
which we achieved with virtually no advertising expense to date.



Consumer-Oriented Mortgage Marketplace. Unlike other sources of mortgage rate quotes, in Zillow Mortgage Marketplace
consumers can anonymously submit mortgage loan requests and receive an unlimited number of personalized mortgage quotes directly from hundreds of consumer-rated lenders. Consumers can then choose to contact those lenders at their discretion. Because
we operate this marketplace as part of our real estate home shopping experience, we can efficiently attract motivated users to the marketplace and prioritize the consumers experience. Consumers submitted nearly one million mortgage loan
requests in Zillow Mortgage Marketplace in the quarter ended March 31, 2011. During March 2011, consumers using Zillow Mortgage Marketplace received an average of 25 personalized mortgage loan quotes per mortgage loan request.



Personalized Experience. We present consumers and real estate and mortgage professionals with many opportunities to
personalize their Zillow experience, leading to more informed home shopping and financing decisions. Users can save favorite homes on Zillow and receive monthly email updates on changes in those homes values, listing status, price changes and
other data. Users also can customize saved searches for any neighborhood or zip code and receive daily email updates on new homes listed for sale, for rent, or price changes for existing listed homes. Once a favorite home or
search parameters

are saved on Zillow, a consumer or professional may access these personalized options every time they visit Zillow on our website or through a mobile device, personalizing a Zillow experience
unique to them.



Mobile Leadership. Shopping for a home is a far more meaningful consumer experience when it occurs curbside 
untethered and on location, so we have developed and operate the most popular mobile real estate applications across iPhone, iPad, Android and BlackBerry that enable people to access and analyze information  where, when and how they want it.
During March 2011, Zillow was used on a mobile device more than 8 million times, with more than 1.4 million homes viewed on mobile devices each day.



Proven Management Team. We believe the extensive experience and depth of our management team are distinct competitive
advantages in the complex and evolving industry in which we compete. The Zillow management team has deep experience building successful consumer Internet companies. In particular, we believe that the shared experience of 11 of our executives, who
held similar positions together at Expedia Inc., provides our management team with unique cohesion and insight.

Enhance Our Living Database. Enhance the information in our database of homes, and use it as the foundation for new
analyses, insights and tools to inform consumers throughout the home ownership lifecycle.



Deepen and Strengthen Our Marketplace. Deepen and strengthen our marketplace by creating new opportunities for
high-quality consumer-initiated connections with real estate and mortgage professionals when consumers want their services.

We provide advertising products and services for real estate and mortgage professionals that provide useful content for consumers.

Marketplace Advertising

Premier Agent Program

Real estate agents in the Premier Agent program can purchase
targeted advertising on Zillow by zip code, at prices that vary based on a number of factors. As part of the Premier Agent subscription, the agents ratings, photo and contact information are featured alongside home profiles and listings in the
relevant zip code, giving

the agent exposure to qualified home shoppers interested in homes in their subscribed zip code. Premier Agents also receive other benefits, including featured listings, showcase advertisements
and designation as a Premier Agent in Zillows directory. Premier Agent subscribers have access to a portal on our website where we provide individualized program analytics, including detailed information on each contact and on clicks and
impressions with respect to featured listings and showcase advertisements.

Zillow Mortgage Marketplace

In Zillow Mortgage Marketplace, consumers request free, personalized quotes in response to their submission of limited anonymous data, such as specific loan amount, zip code, purchase price or estimated
home value, and credit score. Consumers using Zillow Mortgage Marketplace submitted nearly one million mortgage loan requests during the quarter ended March 31, 2011, and received an average of 25 personalized mortgage loan quotes per
mortgage loan request during March 2011. Consumers decide if and when to contact the mortgage professionals who provide quotes. User-generated ratings and reviews of mortgage professionals are provided as a powerful tool to help consumers shop for
their loans.

Display Advertising

Our display advertising primarily
consists of graphical web and mobile advertising sold on a CPM basis. We offer these businesses display advertising opportunities on our home page, on individual web pages through graphical displays and text links, and on our mobile applications
through display ads that are optimized for the mobile experience.

Information Products and Services

We provide consumers with information products and services to enable them to make intelligent decisions about homes.

Zestimates and Rent Zestimates

Our Zestimate and Rent Zestimate valuations are computed
using complex, proprietary algorithms we have developed and refined through years of statistical analysis and technological development.

A Zestimate is our estimated current market value of a home. We generate Zestimates using proprietary information, including:



Physical attributes: location, lot size, square footage, number of bedrooms and bathrooms and many other details.

Prior and current transactions: actual sale prices over time of the home itself and comparable recent sales of nearby
homes.

We use proprietary
automated valuation models that apply advanced algorithms to analyze our data to identify relationships, within a specific geographic area, between this home-related data and actual sales prices. Home characteristics, such as square footage,
location or the number of bathrooms, are given different weights according to their influence on home sale prices in each specific geography over a specific period of time, resulting in a set of valuation rules, or models, that are applied to
generate each homes Zestimate.

To improve
the accuracy of our Zestimates, our algorithms automatically remove or reconcile data that would otherwise inappropriately skew the valuation rules. In addition, our algorithms will automatically generate a new set of valuation rules based on the
constantly changing universe of data included in our database. This allows us to provide timely home value information on a massive scale. Three times a week, we create more than 500,000 unique valuation models, built atop 3.2 terabytes of data, to
generate current Zestimates on more than 70 million U.S. homes.

We publicly disclose the accuracy of our Zestimates to further empower consumers in
assessing a homes value. The accuracy may be impacted by a variety of factors, including the amount of data about homes we have for a particular geographic area.

A Rent Zestimate is our estimated current monthly rental
price of a home, computed using similar automated valuation models we have designed to address the unique attributes of a rental home. We estimate rental prices on more than 100 million homes, including apartments, single-family homes,
condominiums and townhomes.

Rich,
Searchable Home-Related Data and Analysis

We provide consumers and real estate professionals with a rich set of home-related information. Through our website or mobile
applications, users can access detailed information about homes, including:

Value Information

Zestimate

Prior sale prices

Rent Zestimate

Historical Zestimate values

For sale price

Historical Rent Zestimate values

Estimated mortgage payment

Zillow Home Value Index

Rental price

Tax-assessed value

Make Me Move price

Property taxes paid

Home Details

Bedrooms

Number of stories

Bathrooms

Number of units in building

Square footage

Finished basement

Lot size

Cooling system

Year built

Heating system

Property type

Heat source

County

Fireplace

Parcel number

Exterior material

Legal description

Parking type

Neighborhood Information

School district

High school

Elementary school

Walkability

Middle school

Transit access

Listing Details

Price

Price reductions

Listing agent information

Days on Zillow

Listing brokerage information

MLS number

Link to listing source

Consumers and real estate professionals can update property information, including, for example, by adding home photos and personalized information regarding the neighborhood or school district, creating
exclusive home profiles available nowhere else.

Our map-based user interface enables our users to search, navigate and zoom to areas of interest and find and compare home information
quickly and efficiently from a variety of different perspectives across homes, neighborhoods, cities, counties and other geographical regions. Our consumer search experience supports complex search queries and filters across our data set of homes,
allowing consumers to customize their searches and gain actionable insights.

Our team of economists and statisticians generates unbiased local and national real estate
data and analysis on 371 metropolitan areas and approximately 8,700 individual neighborhoods that we provide to consumers and real estate and mortgage professionals at no cost. This gives our users access to local market trends and data, such as
home price cuts, list to sale price ratio and foreclosure data that was historically not easily obtained, if available at all. Users can compare these metrics across neighborhoods and different time periods using our real-time charting and
filtering.

For Sale and Rental Listings

We provide comprehensive for sale and
rental listings through relationships with real estate brokerages, real estate listings aggregators, multiple listing services, apartment management companies, home builders and other third-parties. In addition, we provide consumers with access to
exclusive home listings, such as our Make Me Move listings, which are a homeowners posted price at which they would be willing to move. We also show listings that may not be available on other sources, such as for sale by owner, foreclosure
and rental listings. Real estate agents and landlords may feature and gain more exposure for their listings through our advertising products.

Marketplace of Real Estate Agents

We present consumers with ratings and contact information for the listing agent and local buyers agents alongside home profiles and
listings for homes to assist them in evaluating and selecting the real estate agent best suited for them. We enhance this offering by providing an online professional directory for consumers to search and contact real estate professionals that they
might wish to engage. Our directory includes rich profiles of real estate professionals including 30,000 ratings and reviews provided by our users as of March 31, 2011, allowing consumers to evaluate these agents based on a number of criteria,
including neighborhood specialization, number of listings and number of contributions to Zillow Advice.

Home-Related Advice and Discussions

Consumers have many questions and often seek advice during
various stages of their home-ownership lifecycle. The Zillow Advice section of our website captures questions and discussion topics from our users, both consumers and real estate and mortgage professionals. This allows our consumers to ask questions
of other consumers and real estate and mortgage professionals and quickly learn more about relevant topics. Our users have submitted more than 370,000 questions and answers to Zillow Advice as of March 31, 2011. Zillow Advice also provides real
estate and mortgage professionals with an opportunity to help educate consumers and demonstrate their local expertise. These discussions and content are also indexed and searchable by geography and other custom parameters, allowing users to quickly
find the information they seek. Email updates are used to provide ongoing monitoring and delivery of posts related to topics of interest.

Mobile Access

We operate the most popular platform of mobile real estate applications across iPhone, iPad, Android and BlackBerry. Our mobile real
estate applications provide consumers and real estate and mortgage professionals with mobile, on location access to many of our products and services, including Zestimates, Rent Zestimates, for sale and rental listings and extensive home-related
data. Through our mobile applications, for example, a consumer standing curbside at a home for sale can learn about the homes price, Zestimate, number of bedrooms, and square footage and past sales, as well as similar information about
surrounding homes. The consumer can call a real estate professional through our mobile applications to get more information or schedule a showing. During March 2011, Zillow was used on a mobile device more than 8 million times, with more than
1.4 million homes viewed on mobile devices each day.

At Zillow, marketing starts with product development. We create compelling consumer products that people want to talk about and share.
This enables us to execute a robust and viral communications program that is the primary driver of our brand and traffic acquisition efforts. We launched the Zillow brand with communications at the core of our marketing strategy, which has allowed
us to grow to 19.4 million unique users during March 2011 with virtually no advertising expense to date.

Our communications team includes former print and broadcast journalists, who have established Zillow as an authoritative source for
information on a broad range of home and real estate-related subjects. A typical week includes commentary from our real estate experts across dozens of national print and broadcast media outlets, guest opinion pieces or blog posts by our chief
economist, and wide-ranging national and local media coverage of Zillow products, listings, data, and consumer tips. We also produce considerable home and real estate-related content on Zillow Blog that is syndicated across numerous prominent media
sites. Zillow Blog content ranges from real estate market trends, to home financing tips, to celebrity real estate listings.

We focus substantial public relations effort around the marketing of our Zillow Real Estate Market Reports, which are in-depth reports
produced by our economics and analytics bureau for 131 U.S. markets. Data is released on a monthly and quarterly basis, and Zillow data is widely used by government entities such as the Federal Reserve and Congressional Oversight Panel, as well as
regularly featured in respected media outlets such as the Wall Street Journal, New York Times, Bloomberg, Reuters and across numerous national network and cable news shows including CNBC, CNN, Fox News, Bloomberg and
MSNBC. We believe the considerable effort we have spent on public relations and social media has allowed us to build a large and credible brand.

Our living database of homes creates significant opportunities for home-ownership lifecycle marketing. A typical person will at various
times in life be a renter, buyer, homeowner, mortgage refinancer or seller, and this presents opportunities to communicate with consumers over many years, not just during a transaction. We actively segment and communicate with our users through
email and social media channels. In 2010, we sent more than 125 million email messages to Zillow email subscribers, and we see substantial opportunities to grow home-ownership lifecycle marketing.

Our sales team is responsible for generating advertising customers across our website and mobile applications.

We use a Seattle-based inside sales team to sell Premier
Agent subscriptions to real estate agents and Zillow Mortgage Marketplace advertising to mortgage lenders. We attract these customers through a combination of outbound calling and inbound customer requests generated from our website and event
marketing activities.

We also maintain a field
sales team based in New York, with additional offices in Chicago and San Francisco, to specifically target larger advertising customers in the real estate and related content categories, such as real estate brokerages, home builders, lenders and
home service providers, as well as advertisers in the telecommunications, automotive, insurance and other industries. Our field sales team develops direct relationships with these advertisers and the agencies that serve them.

As part of our sales and distribution strategy, we entered
into a strategic relationship with Yahoo! Inc. that launched in the first quarter of 2011. Our sales team serves as the exclusive sales force for subscription advertising and certain graphical advertising on the Yahoo! Real Estate site.

We believe that customer support is important to our success. Our customer support team,
which is located in Seattle, responds to commercial, technical and consumer issues from our user community and advertisers. The Zillow Advice forum augments our direct customer support by enabling consumers to obtain answers to questions from our
employees and other members of our user community, including real estate and mortgage professionals.

Technology and Infrastructure

Zillow is a data- and technology-driven company. Our technical infrastructure, website and mobile products are built to provide consumers and real estate and mortgage professionals with access to rich
real estate data and powerful online tools to help them accomplish their home-related goals. Many of our services are available through real-time web-based application programming interfaces that allow our information to be easily integrated into
third-party websites. We provide HTML and Javascript-based widgets to allow easy integration of Zillow information onto other websites, with little custom programming. Our technology platform is built using industry-leading third party software and
internally developed software as well as open source technologies. This combination allows for rapid development and release of high-performance software in a cost-effective and scalable manner. For information about our research and development
costs, see Note 2 of the accompanying notes to our financial statements included with this prospectus.

Our website is hosted at a third-party facility located in the Seattle area. Content delivery network solutions have been put in place to
ensure fast and local access to content. Development and test environments are located in a data center we manage at our corporate headquarters. Network, website, service and hardware-level monitoring, coupled with remote-content monitoring allow
our systems to maintain a high level of uptime and availability with high-performance delivery.

Intellectual Property

We protect our intellectual property through a combination of trademarks, trade dress, domain names, copyrights, trade secrets and patents, as well as contractual provisions and restrictions on access to
our proprietary technology.

Our trademarks
registered in the United States and several other jurisdictions include: Zillow, Zillow.com, Zestimate and the Zillow logo. We also have filed other trademark applications in the United States and certain other
jurisdictions and will pursue additional trademark registrations to the extent we believe it will be beneficial and cost-effective.

We have one patent issued in the United States that expires in 2026, and one patent issued in Australia that expires in 2027. These cover
proprietary techniques that relate to the incorporation of individual aerial images and incorporating visual information into a master planar image, and the collection, storage and display of home attribute values. We have 11 patent applications
pending in the United States, which seek to cover proprietary techniques relevant to our products and services. We intend to pursue additional patent protection to the extent we believe it will be beneficial and cost-effective.

We are the registered holder of a variety of domestic and
international domain names that include Zillow, our other trademarks, and similar variations.

In addition to the protection provided by our intellectual property rights, we enter into confidentiality and proprietary rights
agreements with our employees, consultants, contractors and business partners. Our employees and contractors are also subject to invention assignment provisions. We further control the use of our proprietary technology and intellectual property
through provisions in both our general and product-specific terms of use on our website.

Competition

We face competition to attract consumers to our website and mobile applications and to attract advertisers to purchase our advertising products and services.

We compete for the attention of consumers with companies
that operate, or could develop, national and local real estate and mortgage websites. We compete for consumers primarily on the basis of the quality of the consumer experience, the utility of the data and services we provide, the breadth, depth and
accuracy of information, and brand awareness and reputation, and competition for consumer attention is intense. We believe we compete favorably on these factors.

Competition for Advertisers

We compete for advertising customers with media sites,
including websites dedicated to providing real estate and mortgage information and services to real estate professionals and consumers, and major Internet portals, general search engines and social media sites, as well as other online companies. We
also compete for a share of advertisers overall marketing budgets with traditional media such as television, magazines, newspapers and home/apartment guide publications, particularly with respect to advertising dollars spent at the local level
by real estate agents and mortgage lenders to advertise their qualifications or listings. We compete for advertising revenues based on perceived return on investment, the effectiveness and relevance of our advertising products, pricing structure and
our ability to effectively deliver types of ads to targeted demographics. We believe we compete favorably on these factors.

Employees and Company Culture

As of March 31, 2011, we had 252 full-time employees. We believe that our team and company culture has been among the keys to our
success. As a team, we embrace the following principles:

 The Consumer is #1.

This is our guiding principle. We are nothing without consumers and we stay focused on them first.

 Passion.

Our passion is to continually listen to our users and customers and innovate, creating a trusted and vibrant online real estate community.

 Intelligence.

Our business is creating intellectual property and that requires us to think smart.

 Respect.

We listen and give respect.

 Excellence.

We do things well and we take pride in our work.

 Integrity.

We do the right thing.

Government Regulation

We are affected by laws and regulations that apply to businesses in general, as well as to businesses operating on the Internet. This includes a continually expanding and evolving range of laws,
regulations and standards that address information security, data protection, privacy, consent and advertising, among other things. By providing a medium through which users can post content and communicate with one another, we may also be subject
to laws governing intellectual property ownership, obscenity, libel, and privacy, among other issues. In addition, the real estate agents, mortgage brokers, banks, and some of our other customers and advertisers on our website and mobile
applications are subject to various state and federal laws and regulations relating to real estate and mortgages. While we do not believe that we are currently subject to these regulations, we intend to ensure that any content created by Zillow is
consistent with them by obtaining assurances of compliance from our advertisers and customers for their activities through, and the content they provide on, our website and mobile applications. Since the laws and regulations governing real estate
and mortgages are constantly evolving, it is possible that some part of our business activities could fall within the scope of regulation or be prohibited altogether at some point in the future.

In March 2010, Smarter Agent, LLC, a provider of mobile real
estate applications, filed a complaint against us and multiple other defendants for patent infringement in the U.S. District Court for the District of Delaware. The complaint alleges, among other things, that our mobile technology infringes three
patents held by Smarter Agent purporting to cover: a Global positioning-based real estate database access device and method, a Position-based information access device and method and a Position-based information access
device and method of searching, and seeks an injunctive order against the alleged infringing activities and an award for damages. We have denied the allegations and asserted counterclaims seeking declarations that we are not infringing the
patents and that the patents are invalid. In November 2010, the U.S. Patent and Trademark Office granted our petition for re-examination of the three patents-in-suit and its first office action found all claims invalid. In March 2011, the court
stayed the litigation pending the completion of the re-examination proceedings.

In April 2010, First American CoreLogic, a provider of information and analytic services, filed a complaint against us and multiple other defendants for patent infringement in the U.S. District Court for
the Eastern District of Texas. The complaint alleges, among other things, that our website technology infringes a patent purporting to cover a Real estate appraisal using predictive modeling, and seeks an injunctive order against the
alleged infringing activities and an award for damages. We have denied the allegations and asserted counterclaims seeking declarations that we are not infringing the patent, and that the patent is unenforceable and invalid.

In September 2010, LendingTree, LLC, a provider of an online
lending marketplace, filed a complaint against us, and other defendants, for patent infringement in the U.S. District Court for the Western District of North Carolina. The complaint alleges, among other things, that our website technology infringes
two patents purporting to cover a Method and computer network for coordinating a loan over the internet, and seeks an injunctive order against the alleged infringing activities and an award for damages. We have denied the allegations and
asserted counterclaims seeking declarations that we are not infringing the patents and that the patents are unenforceable and invalid.

Although the results of litigation cannot be predicted with certainty, we currently believe we have substantial and meritorious defenses
to these claims and that the final outcome of these litigation matters will not have a material adverse effect on our business.

From time to time, we are involved in litigation and claims that arise in the ordinary course of business and although we cannot be
certain of the outcome of any such litigation or claims, nor the amount of damages and exposure that we could incur, we currently believe that the final disposition of such matters will not have a material adverse effect on our business, financial
position, results of operations or cash flow. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Facilities

In March 2011, we entered into a lease effective through November 2022 for approximately 66,000 square feet of
office space that will house our principal offices beginning approximately in August 2011. This new office space will replace our current 46,000 square feet of office space for our principal offices in Seattle under a lease that expires in February
2013. We lease additional office space in San Francisco, Chicago and New York.

The following table provides information regarding our
executive officers and directors as of April 15, 2011:

Name

Age

Position

Spencer M. Rascoff(1)

35

Chief Executive Officer

Richard Barton

43

Executive Chairman and Director

Lloyd D. Frink

46

Vice Chairman, President and Director

David A. Beitel

42

Chief Technology Officer

Amy Bohutinsky

36

Chief Marketing Officer

Chad M. Cohen

36

Chief Financial Officer and Treasurer

Kathleen Philips

44

General Counsel

Greg M. Schwartz

38

Chief Revenue Officer

Erik Blachford(2)(3)

44

Director

J. William Gurley(2)(4)

44

Director

Jay C. Hoag(3)

52

Director

Gregory B. Maffei(2)

50

Director

Gordon Stephenson(3)(4)

45

Director

(1)

Mr. Rascoff will become a member of our board of directors prior to the closing of this offering.

(2)

Member of the audit committee.

(3)

Member of the compensation committee.

(4)

Member of the nominating and governance committee.

Executive Officers

Spencer M. Rascoff has served as our Chief Executive Officer since September 2010 and will become a member of our board of
directors prior to the closing of this offering. Mr. Rascoff joined our company as one of our founding employees in 2005 as Vice President of Marketing and Chief Financial Officer and served as our Chief Operating Officer from December 2008
until he was promoted to Chief Executive Officer. From 2003 to 2005, Mr. Rascoff served as Vice President of Lodging for Expedia, Inc., an online travel company. In 1999, Mr. Rascoff co-founded Hotwire, Inc., an online travel company, and
managed several of Hotwires product lines before Hotwire was acquired in 2003 by IAC/InterActiveCorp, a holding company of Internet businesses and Expedia, Inc.s parent company at the time. Mr. Rascoff served in the mergers and
acquisitions group at Goldman, Sachs & Co. and also held other positions at TPG Capital, Bear Stearns and Allen & Company prior to that time. Mr. Rascoff serves on the board of directors of Room 77, a privately held online travel
company. Mr. Rascoff graduated cum laude with a B.A. in Government from Harvard University, and he serves on Harvard Universitys Digital Community & Social Networking Advisory Group. Mr. Rascoff is qualified to serve on our
board of directors due to the perspective and experience he brings as our Chief Executive Officer and his extensive background in the Internet industry.

Richard Barton is our co-founder and has served as our Executive Chairman since September 2010. Mr. Barton has been a member
of our board of directors since our inception in December 2004 and served as our Chief Executive Officer from our inception until September 2010. Mr. Barton has served as a venture partner at Benchmark Capital, a venture capital firm, since
February 2005. Prior to co-founding our company, Mr. Barton founded Expedia as a group within Microsoft Corporation, a software company, in 1994, which Microsoft spun out as Expedia, Inc. in 1999 and Mr. Barton served as Expedias
President, Chief Executive Officer and as a member of its board of directors from 1999 to 2003. Mr. Barton also co-founded and has served as Non-Executive Chairman of Glassdoor.com, a salaries and reviews website for companies, since January
2008 and TravelPost, a travel review website, since March 2010, and serves on the boards of directors of several other privately held companies. Mr. Barton serves on the board of directors of Netflix, Inc., an online media

subscription service provider. Mr. Barton holds a B.S. in General Engineering: Industrial Economics from Stanford University. Mr. Barton is qualified to serve on our board of directors
because of the strategic and technical insight he brings as a founder of companies in the Internet industry, including experience in marketing products to consumers through the Internet, and because of his extensive and in-depth knowledge of our
business as one of our co-founders and as one of our largest shareholders. As a former chief executive officer and director of other public companies, Mr. Barton brings managerial, operational and corporate governance experience to our board of
directors.

Lloyd D. Frink is our
co-founder and has served as our Vice Chairman since March 2011, as a member of our board of directors since our inception in December 2004, and as our President since February 2005. Mr. Frink previously served as our Vice President from
December 2004 to February 2005, as our Treasurer from December 2009 to March 2011 and as our Chief Strategy Officer from September 2010 to March 2011. From 1999 to 2004, Mr. Frink was at Expedia, Inc., where he held many leadership positions,
including Senior Vice President, Supplier Relations, in which position he managed the air, hotel, car, destination services, content, merchandising and partner marketing groups from 2003 to 2004. From 1988 to 1999, Mr. Frink was at Microsoft
Corporation, where he worked in many leadership roles, including as part of the original Expedia team and as a Group Program Manager from 1991 to 1995 and 1997 to 1999. Mr. Frink holds a B.A. in Economics from Stanford University.
Mr. Frink is qualified to serve on our board of directors because of his extensive background and experience with Internet-based and technology companies, including experience in marketing products to consumers through the Internet, combined
with his in-depth knowledge of our business as one of our co-founders and as one of our largest shareholders.

David A. Beitel has served as our Chief Technology Officer since February 2005. From 1999 to 2005, Mr. Beitel was at
Expedia, Inc., where he held many leadership positions, including Chief Technology Officer from 2003 to 2005 and Vice President of Product Development from 1999 to 2003. From 1992 to 1999, Mr. Beitel held many leadership positions at Microsoft
Corporation, including Development Lead in the handheld computing group and as a member of the original Expedia team. Mr. Beitel holds a B.S. and an M.E. in Computer Science, both from Cornell University.

Amy Bohutinsky has served as our Chief Marketing
Officer since March 2011. Since joining our company in 2005, Ms. Bohutinsky has held many leadership positions, including Vice President of Marketing and Communications from September 2010 to March 2011, Vice President of Communications between
August 2008 and September 2010, and Director of Communications between August 2005 and August 2008. From 2001 to 2005, Ms. Bohutinsky held many leadership positions at Hotwire, Inc., including Director of Corporate Communications.
Ms. Bohutinsky previously worked for Blanc & Otus, a technology public relations firm, from 2000 to 2001 and was formerly a broadcast journalist with various local network affiliates. Ms. Bohutinsky holds a B.A. in Journalism and
Mass Communications from Washington & Lee University.

Chad M. Cohen has served as our Chief Financial Officer and Treasurer since March 2011. Mr. Cohen served as our Controller from June 2006 to March 2011 and as our Vice President of
Finance from September 2010 to March 2011. Mr. Cohen served as Assistant Controller and Financial Integrity Manager for Ticketmaster Entertainment, Inc., a vendor of live event tickets, from 2003 to 2006. Mr. Cohen served as Vice President
and Assistant Controller for Countrywide Financial Corporation, a mortgage lender, in 2002. Prior to Mr. Cohens employment at Countrywide, he served as Supervising Senior Auditor at Ernst & Young LLP, a provider of assurance,
tax, transaction and advisory services, where he worked in their Technology, Communications and Entertainment practice between 1998 and 2002. Mr. Cohen worked as a Financial Planning Analyst for Novellus Systems, a provider of advanced process
equipment for the semiconductor industry, from 1997 to 1998. Mr. Cohen holds a B.S. in Business Administration from Boston University and is licensed as a Certified Public Accountant in the State of California.

Kathleen Philips has served as our General Counsel
since July 2010. Ms. Philips served as General Counsel at FanSnap, Inc., a search engine for live event tickets, from June 2008 to June 2010, as General

Counsel at Pure Digital Technologies, Inc., the producer of Flip Video camcorders, from September 2007 to June 2008 and as General Counsel at StubHub, Inc., an online live event ticket
marketplace, from May 2005 to April 2006. Ms. Philips served as General Counsel at Hotwire, Inc., from 2001 to 2004 and as its Corporate Counsel from 2000 to 2001. Ms. Philips was an attorney in private practice at Cooley Godward LLP from
1998 to 2000 and at Stoel Rives LLP from 1997 to 1998. Ms. Philips holds a B.A. in Political Science from the University of California, Berkeley, and a J.D. from the University of Chicago.

Greg M. Schwartz has served as our Chief Revenue
Officer since September 2010. Prior to his promotion to Chief Revenue Offic